About turnover
What is turnover
Trading volume is the number of shares that have been traded within a certain period of time, and it is also called trading volume. Trading volume shows the popularity of a stock and a sense of overheating, and confirming that increase or decrease is useful for predicting stock prices. Also, it is generally displayed as a bar chart below the stock chart.
The importance of turnover
By looking at trading volume, you can grasp the popularity and attention level of that stock, and how much interest it has garnered. The higher the volume, the more active the transactions are being carried out.
How to count turnover
Let's say you place a purchase order for 1,000 shares in order to buy a certain stock and make an agreement. In this case, a sale order for 1,000 shares was placed against a purchase order for 1,000 shares, and the transaction was established, so the turnover is 1,000 shares.
The importance of turnover
By looking at trading volume, you can grasp the popularity and attention level of that stock, and how much interest it has garnered. The higher the volume, the more active the transactions are being carried out.
How to count turnover
Let's say you place a purchase order for 1,000 shares in order to buy a certain stock and make an agreement. In this case, a sale order for 1,000 shares was placed against a purchase order for 1,000 shares, and the transaction was established, so the turnover is 1,000 shares.
This does not mean that buying 1,000 shares+selling 1,000 shares = turnover of 2,000 shares. Also, in this case, 2,000 shares are called “transaction volume.” About liquidity risk Liquidity risk means that there is a high possibility that the desired transaction will not be completed because the volume is too low. There is a risk that trading will not be established immediately, or that a transaction will be established at a lower or higher price than expected in market orders. Beginners, in particular, need to be careful about stocks with low trading volume. How to use turnover When turnover increases or decreases rapidly, there is a tendency for stock prices to rise and fall significantly following that. ※This is just a “trend,” not necessarily. Trading volume trend in an uptrend In an upward trend, the level of attention for that stock increases, and investors' buying demand increases. Since there are more people who want to buy, trading volume generally tends to increase in an upward trend. Trading volume trend in a downtrend In a downtrend, the level of attention for that stock decreases, and popularity also declines. Since the number of people who want to buy decreases, trading volume generally tends to decline in a downtrend. When stock prices skyrocket or plummet ⇒ turnover precedes stock prices, which is a good factor, turnover increases rapidly due to “announcements of corporate acquisitions and business alliances, surprise financial results (good performance), dividend increase/share repurchase announcements,” etc., and stock prices often skyrocket. In the case of bad news (failure to meet plans, capital increases, etc.), the number of people who want to sell increases, so turnover increases rapidly, and stock prices also plummet. Also, there are cases where trading volume increases before stock prices fluctuate even though there are no particularly conspicuous materials. (Shares, etc.)
Trading volume in large stocks
If trading volume increases rapidly in the high price range of large stocks, you need to be a little careful. It means that while there are people who want to buy, profit-taking sales are also on the market. If there is a rapid increase in trading volume in the high price range, there is a high possibility that that level will once be the peak of stock prices.
Stocks that usually have low trading volume
When the trading volume of a stock that is usually low and the stock price does not fluctuate much increases rapidly in the low price range, it is generally taken as a sign of buying.
Normally, when the volume of a stock that is not traded very often increases rapidly, it is attracting attention due to some ingredients or large purchases, etc., and it can be said that the number of people who want to buy it is increasing. However, since there is a high possibility that the rise will be transient, it is necessary to be careful about seizing high prices of stocks that are moving like this.
Summarize
There is a high possibility that a rapid increase or decrease in trading volume will have an impact on stock prices.
We recommend that you check the increase or decrease in trading volume in addition to analyzing charts, performance, etc. for stocks you are interested in.
※All of the above are not “absolute,” they are just “trends.”
If trading volume increases rapidly in the high price range of large stocks, you need to be a little careful. It means that while there are people who want to buy, profit-taking sales are also on the market. If there is a rapid increase in trading volume in the high price range, there is a high possibility that that level will once be the peak of stock prices.
Stocks that usually have low trading volume
When the trading volume of a stock that is usually low and the stock price does not fluctuate much increases rapidly in the low price range, it is generally taken as a sign of buying.
Normally, when the volume of a stock that is not traded very often increases rapidly, it is attracting attention due to some ingredients or large purchases, etc., and it can be said that the number of people who want to buy it is increasing. However, since there is a high possibility that the rise will be transient, it is necessary to be careful about seizing high prices of stocks that are moving like this.
Summarize
There is a high possibility that a rapid increase or decrease in trading volume will have an impact on stock prices.
We recommend that you check the increase or decrease in trading volume in addition to analyzing charts, performance, etc. for stocks you are interested in.
※All of the above are not “absolute,” they are just “trends.”
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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