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Aarroncikk
08-30-2015,
What does volume tell you about a stock and its potential? What is considered good and/or bad for a stock and why? Wondering how this adds to the big picture when trying to guesstimate where a stock might be headed...
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ADreattylilt
08-30-2015,
Quote:
Originally Posted by Kuzami View Post
What does volume tell you about a stock and its potential? What is considered good and/or bad for a stock and why? Wondering how this adds to the big picture when trying to guesstimate where a stock might be headed...
Volume can work both ways lots of it when going up and down. You hear it said all the time "it has good volume" Volume as an indicator is not very good IMO- but other indicators use volume in their equations.

Then what is the big fuss over volume-- It would be more accurate to say buying and selling pressure. Is the volume heavy with strong buys or sells.Were the buy shares more than the sell shares. Sometimes the market makers will knock the PPS down on hardly nothing so he can gather shares and vice versus. I would rather look at the last sale and try and determine if the stock is strong or not or gainining momentum. We should have that tool here with-in a few weeks..

A stock that has been dormat in the volume area and has just been chugging alone and then starts to get increased volume may be a clue that something is up.. Many people will look at the 10 day 30 day volume averages and see if the volume is increasing. I personally dont use it because I find other indicators better.

In the same token though we dont want to buy 500k worth of shares in a stock that has a 33k 10 day volume averaage unless its a forward looking event coming up or maybe good news exprected to come out soon.

I hope this answers you question
Thank you -volume confuses many newer traders