Volume is important when trading any of the different markets. Stock prices can only move up when buyers become aggressive and raise bids to chase diminishing supply. Prices drop when traders or sellers are desperate to get sell a stock and drop their prices to bring in scarce buyers. Often in a breakout, the price moves above when a prior buying area that has already been weakened. When investors and traders see that new high being made, they jump on board and the volume spikes. This can be a problem sometimes.
Forex and stock traders are looking for the consistently wrong investor, trader and take the opposite position. This will obviously lead to winning trades for them. All traders have read trading books that point out that increasing volume is good for the continuation of the trend. Many new stock traders will try and fight the trend.
Thursday, November 14, 2013
Breakout Trading Stock Market Volume
Volume is important when trading any of the different markets. Stock prices can only move up when buyers become aggressive and raise bids to chase diminishing supply. Prices drop when traders or sellers are desperate to get sell a stock and drop their prices to bring in scarce buyers. Often in a breakout, the price moves above when a prior buying area that has already been weakened. When investors and traders see that new high being made, they jump on board and the volume spikes. This can be a problem sometimes.
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