Trading volumes are not at all consideration for many Indian retail investors, only during buy order of Risky Shares or Small Capital Shares traders are recognizing its Importance. But trading volume is obligate substantial factor, particularly for Day Traders
Number of Shares Exchanged through exchanges (both buy and sell confirmations) is called as Day’s Total Trading Volume.
Trading Volume Depends on various aspects like
- Total capital, free shares of company available.
- Activity Promoters and Chief Stakeholders of Company
- Investors’ Interest on that company shares.
- Any news or rumor about the company.
Negative Hint Of Trade Volumes:
A negative news precluded with very large traded volumes indicates rapid vanish in share price and vice versa. For example after scam Satyam computers, more than 90% share value vanished out with immense trade volumes never seen before.
Caring While Investing In Low Trading Volume Shares:
Investors should take utmost care while buying very low trading volume shares. Suppose an example, if you bought 3000 SHARES from an industrial company X. considering Trading Volumes as 1000. Then, you must stay for a lot of trading sessions to sell your shares. Hence investing in this type of shares is never recommended nevertheless in a carefully analyzed trusted company with maintenance of good balance sheet.
Investing Based On Trade Volumes:
Investing based on trade volumes analysis includes buying of shares whose Value is Either Constant Or Little Rising from many trading sessions along With Continuous Adding Up of Trading volumes. For Intra-day Market Investors observing of trade volume grids is best way of analyzing Intraday and Short term market progress.
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