When to Buy and When to Sell When It Comes to Stocks
When one is looking to invest in a stock market, there are many things to take into consideration. Many consider volume to be the most important though. Volume is nothing more than the number of contracts or shares during a specific period of time. The volume is a good measure of the liquidity of the market as a whole. It can also tell you the same about an individual stock. During a normal transaction, each transaction will have both a buyer and seller. The more volume in a stock or market, the better your chances are of a successful transaction that is completed quickly.
Others say that price movement should be the most important factor. Here is where the money is made in the stock market. While volume tells a great deal about supply and demand, you must interpret these things properly. The volume is what tells you which big institutions are showing interest in the stock you are considering. As much as 75% of the activity on the stock market comes from high volume stocks so this should be a crucial factor.
Stocks which are strong have big point gains and this leads to new highs. Upward price movements are usually seen during heavy volume and, when the stock goes to correct itself, the volume will be much lighter. When you see volume and price action of this type, chances are good that this stock is a healthy one. In contrast, if the price of a stock drops on heavyVCP-410 volume, your investment may be in trouble. Another warning sign that you don’t have a healthy stock is a situation in which your stock rebounds, but it does so at a smaller than average volume or in smaller steps. If this occurs, it is most likely time to sell. Make sure you remain objective in all of your trading decisions to bring in the most profit.
In simple terms, when you see heavy volume and a price recovery or you see a big sell-off and then a quick bounce back, this is a good sign. When the stock doesn’tVCD310 bounce back after a sell off or the volume is low, it is time to sell. Keep this in mind and you will see your profits rise.
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