Key Techniques for Successful Investment: Trading Volume Analysis

Trading volume is an indicator that stock investors should refer to. Trading volume is a record of the day’s fierce battle in the stock market and is the result of quantitative battles between the forces trying to buy stocks and the forces trying to sell it, and it is a measure of the intense trading battles between buyers and sellers.

In other words, trading volume is a very important indicator of how aggressively buyers and sellers have engaged in combat trading.

On the day when the power to sell stocks is active, the number of stocks is increasing and the buying power is overwhelmed, and the volume of transactions is greatly increased.

On the other hand, if the day is for active forces to buy stocks, the amount of stocks increases and the amount of stocks increases explosively.

If you look at the trading volume of stocks, you do not know whether buyer’s force are strong or seller’s force are strong. But what we need to know is that if stock trading is actively done, stock trading volume will surely have increased.

The active stock trading shows that someone has actively bought or sold stocks. So, the surge in trading volume of a particular stock means that someone has reason to buy it.

We can reasonably believe that stocks are stocks with reason to participate in trading as much as trading volume has occurred. And this is the most important information you need to know through volume analysis.

If you look at the size of the trading volume, even beginners who do not know the trading volume can see quantitative changes and can judge whether the stock is active or not.

As you become more familiar with transaction volume analysis, you gain a more logical approach. At any particular point in time, you can determine if it is a popular stock ticker or read a story about a transaction.

For example, “someone bought shares in company A and sold shares in company A” is a fact that tells you that stock trading actually happened. However, if “A company’s stock has been sold for 10,000 shares and the stock has fallen by more than 10% in a moment,” you can see that there was a strong sell order and that the stock price fell.

You can infer this rich information from a single trading volume of information. A series of consecutive trading volumes should be able to read a richer story. Consecutive trading volume is like a book that can read a story about the event.

If you can read a lot of meaning and stories hidden in the volume of transactions, you can minimize losses and maximize profits. Losses and returns can vary depending on how much you imagine through the volume of transactions and how much you can find mean through imagination.

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