How Important is volume to you in making stock stock buy-sale decisions.?

Volume is important if you are looking for short term using technical analysis and less important for long term using fundamental analysis.

I being more on short term, I always consider Average volume and price volume movement as important indicator. The higher the volume the better Confidence I get in justifying the current price os the share as more people believe in current price.

Generally, Volume in large cap is higher and volume goes down with market cap but there are others factors also like how much share is open for public trading, volatility etc.

For some basis understanding you may visit

http://tutorials.topstockresearch.com/TutorialsOnP...

Extremely!

The whole point of buying a stock is for the profit potential. Thinly traded stocks dead end for they disallow the opportunity to unload the stock. While volume rises when the valuation rises, it may not be enough to offset risks associated with large accumulations.

Volume changes tell us how popular the stock is at any given moment. High volume during a diminishing share price means the stock is out of favor. That's the time we need to explore the possibilities explaining that drop. By the same token. when the price is rising for no "apparent" reason, it's time to check blogs for missed information and I always look for SEC filings such as insider buys which tell you as much as anything else.

Len

If you don't have volume you can't be sure of getting a fair price, or any price when you buy or sell. This is why lightly traded stocks are so risky.

in small cap trades it is very important. in a blue chip purchase it is less important because i am looking for a high yielding stock at a good price, and less of a short term trade.

Not that important, because I do only long-term investing for income (dividends). Your question assumes a short-term "trading" motivation.

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