How to find the most active stocks
April 3, 2020
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Why trade the most active stocks
“Knowing which stocks are the most actively traded can provide investors with information about the liquidity of a security, insight into market sentiment about the company and how likely a price increase or decrease will stick. Many financial websites offer lists of daily, monthly or yearly most actives. Below, we will discuss websites that provide additional advantages like more detailed lists, the ability to customize lists and information that is usually behind a paywall.
The Importance of Trading Volume
The average daily trading volume is an important statistic for both traders and investors to understand. The trading volume is the number of shares or contracts in that trade in a given time period, usually one day. The importance of volume lies in its ability to help traders ascertain how and why a security is moving a certain way. Tracking trading volume provides information on how a particular stock is performing, what is driving the stock price, and how strong or weak the move may be. For example, if a stock begins trending upwards and is accompanied by a high trading volume, it is a sign that the upward trend will stick and continue. If a stock is trading upwards and is accompanied by low trading volumes, it is an indication that the trend may be weak and quickly reverse itself. Trading volume can also provide clues on the likelihood of future price movements. Stocks generally have high trading volume when there is news about the company or new significant related information. For a stock to make a significant move or break through a resistance level, usually a high trading volume is needed.
The higher the volume, the greater the potential for a price change to stick, which can lead to strong price momentum.”
Several financial and investing sites provide information for the most active stocks. Some of them are Yahoo Finance, Investing.com, Money CNN.