What are the important levels of stock trading volume?
How you can decide that the current stock is trading with important or abnormal stock volume
When I see strong stock trading volume for a particular stock in my watchlist, I’m more confident about entering trade. But how can you decide that today’s volume is important or an abnormal stock trading volume? I use this technique: I use the free stock trading software
Quotetracker
for monitoring interesting stocks during a trading day.
Here's basic info about this setup.
The most important column I monitor is Vol%. What I like to see is that the stock must present bigger volume than most of the other stocks in my watchlist. It’s also very good to compare every stock with a current volume level of QQQQ stock. This ETF is a heavily traded instrument. So if I can see stock with a current volume level near the current QQQQ stock trading volume level or above this level, I prepare for action or start to monitor stock much more closely. Here are some examples: 1. Watchlist after the first trading hour; please notice as CG and CVA stocks are already trading above the QQQQ stock volume level.
2. One hour later - CG and CVA present huge volumeBoth stocks are near 50% of average trading volume after 2 trading hours already. They signalize something is happening with them.
3. And finally, before the close of the markets. Abnormal stock volume levels are confirmed for CG and CVA stocks.
Alternative way for average stock volume monitoring
Quotetracker is quite good piece of software for these purposes. But there is possible to use also alternative source.First there is necessary to find average volume for monitored stock. It is possible to check Yahoo finance site to obtain this info. Here is example for AAPL stock.

The same data must be obtained also for QQQQ as reference stock. Oh wait, these days (09/2011) it is renamed to QQQ again.These data about average volume level should be put into some spreadsheet and then you can also put there some important levels like 30%,50% and 80% af daily average volume. Then monitor actual stock volume in your
stock broker trading application
and compare it with levels you have written in your spreadsheet. If you find that stock passed 50% level during first or second trading hour you know that something is happening with stock.
Return from Stock trading volume to stock chart analysis
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