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Volume Ratio - a piece of the market puzzle
Posted: Nov 18, 2020 22:12
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Price and volume are the basic building blocks of market data, but they conceal much more than they reveal. The Volume Ratio is one such hidden gem in the larger market puzzle.
How is Volume Ratio Computed?
We compute the volume ratio by dividing the day's volume by the average volume of the last 15 trading days. We combine BSE and NSE volumes (number of shares traded) for these calculations. The stocks with the highest volume ratios are highlighted in our reports. We focus on the 240 most heavily traded stocks over the last 15 sessions for our analysis.
Why is Volume Ratio Important?
A high volume ratio indicates unusual activity in a stock. There's likely a reason behind this abnormal volume - it could be company news, market trends, or algorithmic trading. Our report flags these stocks for you, inviting you to dig deeper.
How to Use Volume Ratio Information?
The volume ratio is not an indicator in itself, but a starting point for further investigation. A quick Google or Twitter search for the company can often reveal why the abnormal volume occurred. This could present a trading opportunity or simply enhance your understanding of market dynamics.
Remember, informed decisions are always based on thorough research. The volume ratio provides a direction, but it's up to you to walk the path.
Historical Data and Learning Opportunities
We provide daily data from July 1, 2020, allowing you to analyze past instances of abnormal volumes and their market impact. This hands-on approach will help you understand how volume ratios work in real-world scenarios.
For those interested in learning more about proven as well as unconventional ways of outperforming the market, we offer an online course:
Online Course: Trading and Investing Strategies
This course covers proven profit-making strategies along with more creative approaches to market analysis.
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