1. Understanding trading volume VOL
1. The meaning of trading volume VOL
VOL is a trading volume indicator, which refers to the number of transactions of individual stocks or the market within a certain period of time. In general stock trading software, it refers to the total number of transactions (1 lot = 100 shares) .
The trading volume is reflected in the stock trading software as a vertical pillar. The greater the trading volume, the higher the pillar, and vice versa. To put it bluntly, trading volume actually reflects whether the market is hot or not during a period of time and whether investors are enthusiastic about trading.
Like the K-line, the trading volume VOL can also be divided into daily trading volume, weekly trading volume, monthly trading volume, etc. according to the time period. When we switch the K-line period, the trading volume period will also switch accordingly.
Take the computer version of Jindouyun Intelligent Investment software as an example. If you open a stock at will, you can see the trading volume chart just below the K line. Currently we choose the daily K chart, and what appears below is the daily trading volume chart, which is also what we most commonly use.
Move the mouse left or right, and the yellow characters in the upper left corner will display the trading volume data of the day. What the picture shows is that on December 22, 2021, the trading volume of the stock was 341,600 lots.
2. Calculation method of VOL trading volume.
Trading volume can be divided into active buying transactions (external trading) and active selling (internal trading). Therefore, the calculation method is: trading volume = internal trading + external trading.
Taking Maotai's trading data on a certain morning as an example, the sum of the total number of transactions in the external market and the internal market is the trading volume.
3. What are volume expansion and contraction?
The change in trading volume from large to small is called shrinking volume, and the change in trading volume from small to large is called large volume.
Shrinkage means that the trading volume in the market has significantly decreased compared with before, indicating that buyers and sellers are calmer and transactions are less active.
There are generally two situations when shrinkage occurs:
First, the market is not optimistic about the stock market, and everyone just wants to sell their stocks, but no one is willing to buy them.
Second, the market is very optimistic about the stock market. Everyone wants to buy stocks, but no one is willing to sell, so there are few transactions.
As opposed to shrinking, increasing volume means that the market's trading volume has increased significantly compared with before, and buyers and sellers are actively trading. In other words, there are two groups of people in the market, and there are huge differences in their judgments about the stock market. One group of people is optimistic about the market outlook and is buying and selling like crazy, while the other group is not optimistic about the market outlook and has sold their tickets one after another. .
Shrinking volume is a relatively real reaction to market sentiment, but increasing volume may lead to fraud, because the main force may take advantage of capital to buy and sell a large number of stocks, creating an illusion of high market sentiment, in order to achieve the purpose of manipulating the market. . Therefore, traders should be more cautious when encountering heavy volume.
2. The relationship between trading volume and stock price
There is a close relationship between trading volume and stock price, and many investment tycoons are also obsessed with studying the relationship between volume and price.
In general, there are actually only two relationships between quantity and price.
One is the normal state, where the volume and price change in the same direction, which is the so-called "when the price rises, the volume increases, and when the price falls, the volume shrinks."
When the price rises and the volume increases, that is, the stock price rises, and the trading volume also increases. When the price falls and the volume shrinks, that is, when the stock price falls, the trading volume also shrinks.
The other is that the quantity and price change in opposite directions, and the quantity and price deviate. This is the so-called "when the price rises, the volume shrinks, when the price falls, the volume increases."
The price rises and the volume shrinks, that is, the stock price rises, but the trading volume shrinks. The price decreases and the volume increases, that is, the price decreases but the trading volume increases.
3. Practical skills of trading volume VOL
The change of trading volume is a continuous process. In this process, there will be several different stages, and the indicator form and actual operation strategy of each stage are different.
To sum up, it is actually the following eighth-order law diagram:
Once we have mastered this eighth-order law, we will basically master the practical secrets of trading volume.
Okay, that’s the end of this course. See you next time!
Risk warning: The above methods are for reference only. When investing in stocks, you still need to make a comprehensive judgment based on other information. The stock market is risky, so you need to be cautious when investing!