How to Buy & Sell Stocks on High Volume Days

Investing in the stock market is exciting, but can also be overwhelming for new investors. After determining which stocks are a worthy investment opportunity, the next decision will be when the time is right to buy or sell your shares. You may have heard the term "volume" used often. Stock volume refers to the number of shares traded during a given time period. Volume data is recorded for each individual stock. When a stock has a very active trading day, it is considered high-volume.

Research stocks. If you are new to investing in the stock market, start with companies with which you are familiar. Analyze financial statements and follow each stock for a couple weeks to determine if it is a good investment.

Learn to differentiate the difference between volume surges. Some stocks can be high volume because the price is rapidly declining. Other stocks may be very active due to media exposure or a new product launch.

Review stock volume on charts. The volume, displayed horizontally, signifies the amount of liquidity in a stock. Generally, if a stock is trading on low volume, there are a limited number of traders involved in the stock, making it more difficult to find a trader to buy stock from or purchase your share.

Monitor the price. Stock prices fluctuate throughout the day. Avoid buying a stock when at its peak. The principles of supply-and-demand play a prominent role in the stock market. On high volume days, a large number of buyers can drive up the price of a stock.

Seize an opportunity. Panic selling is the wide-scale sale of a particular stock. The high volume of selling triggers a sharp decline in the price of the stock, often resulting in stocks cheaper than their true value. This can be the ideal time for some investors to purchase cheap shares.


About the Author

Jeannine Mancini, a Florida native, has been writing business and personal finance articles since 2003. Her articles have been published in the Florida Today and Orlando Sentinel. She earned a Bachelor of Science in Interdisciplinary Studies from the University of Central Florida.