From this general scenario, nothing better than really knowing what the volume of hiring consists of. Well, the trading volume is a very important indicator to understand the stock market movements. It can provide you with the most objective guidelines so that you can spot a trend reversal as quickly as possible. It is a more reliable detection system than others. He is rarely wrong in his diagnosis and instead can benefit you when designing your investment strategy from now on. You will almost always benefit from the information it provides from its rigorous analysis.
On the other hand, it will be necessary for you to take into account from now on that the trading volume responds exactly to the amount of securities, operations or money that has been traded on the stock market in a given period of time. Of course, it does not matter if it is in short or long periods, even from the perspective of the intraday operations. In other words, carried out in the same trading session. What is the one that measures the volume of business? Well, something as simple as how many shares have been redeemed in that time frame. It will be vital information for you to make your decision with greater guarantees of success.
Contract volume: its effects
As long as it happens, it is because it warns that something is happening with that value. With the entry of significant capital into their positions, even though it can also be a sign of the flight of investors. Too easy detect this movement since it appears in almost all specialized media. This is why it is very convenient that you look at the volume of hiring to shore up the positions that you are going to open from that moment. This is a move that rarely lets you down. If not on the contrary, it serves to offer you an analysis tool in your investment strategy. Above other technical approaches.
Distance from markets
Either way, hiring volume can have many applications. Of course, more than you imagine from the beginning. Because it can be a very reliable indication of the distance of many investors from the stock markets. As a result of this trend, it can be used to direct you to other, safer financial instruments. As an example, those who are represented, by means of the fixed income market (bonds) or monetary (bills, deposits ...). It is true that under a significantly lower profitability and that it rarely exceeds the established margin of the 2%. But with full guarantees that you will not lose money and by the way you will get a fixed and guaranteed income every year.
On the contrary, if it is an indication of a new inflow of money in the equity markets, its effect will be the opposite. Actually, it will be helpful to empower your entry into the bag. Even depending on its intensity under more aggressive levels than normal. Or perhaps to formalize new purchases on the same security or financial asset. At the end of the day, it consists of how profitable the trades are. To try to improve your checking account balance. It does not matter what profile you present at that time as a small and medium investor.
Very important for the Ibex 35
Many people forget with some frequency that the trading volume is very important to compose the selective index of the Spanish Stock Exchange, the Ibex 35. Indeed, this indicator is one of the control parameters that the Technical Advisory Committee values to establish the values That will be traded on this stock index. Among other reasons why it consists of a data of special importance for examine the liquidity of these securities in each control period. In which case, there are usually reviews twice a year.
Its relevance also lies in the fact that it is the large companies that are listed on the Stock Market that present the highest volume of contracts. To get information, you should know that during this exercise the Ibex-35 companies that moved more money daily in the sale of shares were: Banco Santander, Telefónica BBVA, Inditex and Iberdrola. With a level much higher than the rest of values and that in any case originate a perfect liquidity to carry out your operations in equities.
Period in which the volume varies
Holiday periods are not the most appropriate to increase the volume of hiring in listed companies. This is one of the main reasons why in August the market decreases in the number of operations made by investors. Not surprisingly, it is one of the most powerful indicators that very clearly indicate the little activity in the stock market during that period of the year. To the point that the situation directly affects the liquidity of the securities traded, which is truly minimal in these summer days.
On the other hand, it should not be forgotten that this parameter largely determines that the decision of small and medium investors leans towards one or the other value. Above other series of considerations, both technical and from the fundamental approaches. It is not just any tool, but it is one of the most credible for buying and trading stocks on the stock market. You just have to understand their interpretation above other approaches.
Warns against corrections
Nor should it be ignored that the volume of contracts is an especially useful tool to avoid corrections in an adverse scenario. Actually, when these characteristic movements unfold in the stock market warns you that there is a change in the decision of the investors. With a clear imposition of sales to purchases. This action immediately translates into increased activity in the exchange of securities. Regularly with a notable increase in the negotiation of the titles that will catch your attention very soon.
This is one of the main reasons why you should pay special attention to this part of the equity analysis. Even sometimes it's a lot more effective than figure training using the graphics. Even if you combine both systems, you will have more security so that you can achieve the desired successes from that moment on. From this point of view, its utility is more maximum and therefore you can take advantage of this feature to establish your operations in the equity markets. You will see how the results are frankly beneficial when applying any of the investment strategies.
Advantages in its application
Whatever the case, it will be convenient for you to know some of the benefits that this particular analysis system provides. Among which the following stand out.
- Detect any change of trend and of any sign, both in bullish and bearish processes. There are no limitations on its use despite what you may believe at this time.
- It is extremely easy to know the volume of contracting given that it will be enough for you to look at this data which will be displayed in the values file.
- When you see that there is a significant change in the negotiation, it will mean that something is happening with the value in question or that you are currently analyzing.
- It is a variable that appears in every trading session, as your price and the limits they have shown on their date. It will be an indication to understand what you should do at all times and in all kinds of situations.
- And finally, remember that any increase in the volume of hiring it does not have to mean that you are facing a marked uptrend in value. Because it can basically be the opposite move. It is the greatest difficulty you will have to analyze it from now on.
