10/1/2019 High Volume But No Price Movement
There is a common misconception that volume cannot be used reliably in Forex trading for two reasons: firstly, there is no central exchange and therefore no official volume data. Secondly, when you’re looking at volume data on your Forex platform, you’re actually seeing “tick volume”,.
TipAs volume decreases, any price fluctuations that occur may be less predictable than they were in times of higher volume. Interpreting Price and Volume ActionPrice action reflects investor sentiment. If a stock is rising, investors are eager to buy; if it is falling, investors are eager to sell.
But for a move to be valid, the stock price action must be confirmed by volume. As technicians say, volume goes with the trend.
Volume shows how much conviction investors have in a trend.When you multiply the number of shares traded by the current stock price, you get the total dollar amount that investors are willing to put at risk. Low volume means few investors are putting only a little money at risk.
You cannot trust such price moves, as they are fickle and can easily reverse. Indecision or UncertaintyWhen things are unclear, many investors tend to stay on the sidelines and stop trading, so the volume dries up. But if some traders feel compelled to act out of boredom or to entice others to act, their trades can push prices up or down in a slow market.
Other traders may act prematurely, hoping to be ahead of the crowd. But if others do not follow those moves, stocks can quickly return to their previous levels. Understanding ManipulationIt is easier to manipulate a stock when its volume is low. All a manipulator needs to do is execute a few carefully timed trades to create the illusion that a stock is moving so he can get others to buy or sell. The goal is to raise the price if he wants to sell and to lower the price if he wants to buy. If you are suckered in by such a move, your position can quickly turn into a loss as the stock you just bought suddenly reverses course on increased volume. Thinly Traded StocksSome stocks simply routinely trade on low volume.
The risk of trading a low-volume stock, besides the above reasons, is that behind each stock there is a professional trader who trades it day in and day out and who will try to profit from your order by moving the price away from you so you end up overpaying when you buy or getting less when you sell. Copyright © Zacks Investment ResearchAt the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1986 it has nearly tripled the S&P 500 with an average gain of +26% per year. These returns cover a period from 1986-2011 and were examined and attested by Baker Tilly, an independent accounting firm.Visit for information about the performance numbers displayed above.NYSE and AMEX data is at least 20 minutes delayed.
NASDAQ data is at least 15 minutes delayed.
Almost any post related to stocks is welcome on. However, don't hesitate to tell us about a ticker we should know about!Resources.Rules.Disclose any related open positions when discussing a particular stock or financial instrument.Spam, ads, solicitations (including referral links), and self-promotion posts or comments will be removed and you might get banned. Instead,.Context & effort must be provided; empty posts or empty posts with links will be automatically removed.The Robinhood app should be discussed in. Posts regarding this topic will be automatically removed.Trolling, insults, or harassment, especially in posts requesting advice, will be removed.Bitcoins & cryptocurrenies should be discussed in.
Non-ETF Posts regarding this topic will be automatically removed,.No pump & dump ticker discussions. We don't have a rule against microcap stocks, but they're susceptible to pump & dumps and those posts will be removed as spam/promotion and Consider, orNovember Earnings Calendar SMTWTFS30Filter By Flair.Related Subreddits (see the rules above for related subs as well).logo. Was watching ticker STRI (junk stock with no fundamentals) getting promoted by a pump-and-dump group today. The volume increased 70 times the normal daily volume (normal volume around 6k; today's volume over 430k) for the stock, however, there was almost no volatility in STRI. It literally moved the least in the last month of trading.Can someone explain what I was seeing? How is it possible that a stock could have such a huge volume increase and not move at all?
Is someone using the pump liquidity to dump their position? If so, why wouldn't they let the price rise before unloading the stock?.
Comments are closed.
|
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |