It is NOT SAFE to trade in LOW VOLUME STOCKS!
IN Technical Analysis IF PRICE is KING, VOLUME is QUEEN!
Stock Volume is the daily number of shares of a security that change hands between a buyer and a seller.
Volume is a trader's second best friend (afterall Trend is the first best friend of any trader!!).
Volume offers a complete picture of the market.
Volume can help determine the health of an existing trend.
Specialty volume for indexes and volume-based technical analysis are very good indicators for predicting index shifts.
Volume is the indication of supply and demand. It's defined as the number of units traded during a time period. This number is significant in that it supports the prevailing price trend.
The technical analysis of volume is a basic yet very important element of market timing strategy. Volume provides clues as to the intensity of a given price movement.
Minute-by-minute trading volume shows the reversal points of the market, and therefore when to buy and sell!
Currently when a change in sentiment occurs in the market, most people dont find out until it is too late. This can be costly to an investor. Trading volume offers investors an invaluable tool to know when and where a change in sentiment is going to occur, and act accordingly.
Intraday volume helps you see where a stock is being repeatedly bought as it dips. Likewise, towards the end of a rally, a wide volume spike often signals that the move is at an end, at least short-term. If you weren't aware of it before, you should be starting to see why volume is a trader's best friend.
Additionally, unlike many indicators, volume is applicable to every timeframe. How can this be? Simple: volume is a measure of sentiment. Fortunately for us, human nature is the one ever-present constant of the stock market. Never forget that fact. Once you have your own emotions under control as a trader, knowledge of this profound fact will guide you ever after as reliably as the Northern Star guides a lone sailor across a vast sea. Now you should really be starting to see why volume is a trader's best friend.
