What is "insufficient volume" while paper trading? (2024)

FAQs

What is "insufficient volume" while paper trading? ›

Insufficient Volume means there are not enough buyers/sellers available. Such types of stocks are called illiquid stocks. MoneyBhai is trying to tell you that if you had placed this order in the live market, it won't be executed quickly at the preferred price due to illiquidity.

So, low trading volume can indicate a lack of interest in either buying or selling. That means it could be bullish if low volume occurs in a downtrend. It could be bearish if it's noted in an uptrend.

The first trader buys 500 shares of stock ABC and sells 250 shares of XYZ. The other trader sells those 500 shares and buys the 250 shares of stock XYZ to the first trader. The total volume of trade in the market is 750 (500 shares of ABC + 250 XYZ shares).

Volume measures the number of shares traded in a stock or contracts traded in futures or options. Volume can indicate market strength, as rising markets on increasing volume are typically viewed as strong and healthy. When prices fall on increasing volume, the trend is gathering strength to the downside.

Trading volume also serves as a warning as to whether a stock is on the verge of breaking into upside territory (high volume) or into a downside trend (low volume). High volume also gives investors more flexibility to determine when it's the right time to sell since it translates to greater liquidity.

Typically, any stock that trades at fewer than 10,000 shares a day is considered a low-volume stock.

Day traders usually want to stick with higher volume stocks, because that means there is more price movement. This is because day traders need to make sure they can enter and exit trades quickly. It is recommended that day traders look for stocks with at least one million in volume.

Trading volume is calculated by the number of stocks involved in the transaction for a specific period. Example 1. You bought 30 stocks and sold them on the same day. Your trading volume for the day was 60 stocks.

A good volume in the stock market is subjective and varies based on individual trading strategies and market conditions. Generally, higher volumes relative to the stock's average volume may indicate increased interest and liquidity.

To reduce such risk, it's best to stick with stocks that have a minimum dollar volume of $20 million to $25 million. In fact, the more, the better. Institutions tend to get more involved in a stock with daily dollar volume in the hundreds of millions or more.

How to check stock trading volume? ›

The trading volume can be found on the stock exchanges, financial news websites, and other third-party trading and investment websites. Besides, brokers also provide traders with trading volume information. Trading volume is represented through candlestick charts.

Average Daily Trading Volume (ADTV) refers to the number of shares of a particular stock that, on average, change hands during a single trading day. Significant deviations from the ADTV usually indicate greater or lesser buying or selling interest in the stock from large institutional investors.

Why It Matters. If you see a stock that's appreciating on high volume, it's more likely to be a sustainable move. If you see a stock that's appreciating on low volume, it could be a dead cat bounce. Logically, when more money is moving a stock price, it means there is more demand for that stock.

Volume indicators are technical analysis parameters that determine a currency pair's buying (demand) and selling (supply) pressures and in turn, help understand which side controls the price action. Volume is the total number of traded lots or changes in currency pair price in a specific time period.

Price to earnings ratio, or P/E, is a way to value a company by comparing the price of a stock to its earnings. The P/E equals the price of a share of stock, divided by the company's earnings-per-share.

Minimum Trading Volume . “ shall mean the minimum trading activity (based on Closed Positions) in terms of United States Dollars or the equivalent in another currency.

Logically, when more money is moving a stock price, it means there is more demand for that stock. If a small amount of money is moving the stock price, the odds of that move being sustainable are lower. Also, be careful of low-volume (illiquid) stocks, where you could end up trapped in a pump and dump scheme.

Stocks with low volumes can be difficult to sell because there may be little buying interest. Additionally, low-volume stocks can be quite volatile because the spread between the ask and bid price tends to be wider. Stocks with a high volume and a rising price are generally easier to sell at a desirable price.

If you try to place a trade for a volume beyond these limits, you will see the 'Invalid volume' error. Your Expert Advisor (EA) may be attempting to open a trade for a volume that is beyond the limits set for that particular instrument or that account type.