Average Daily Volume

[cpatte7372]

Hello,

Can someone please give me their suggestions on what type of average daily volume I should be looking for when considering which stocks to swing trade?

Cheers

Carlton

P.S.

Bad grammar - sorry!

[DuaneG]

Hi Carlton,

Looking at your post, it looks like you have nailed down some sort of trading time frame. Good job. As far as using average trade volume, it still varies from trader to trader, but I have heard of 50 day volume averages, 65 day averages. It is going to depend mostly on you and where you tend to see the best moves with the clearest signal. This is going to take some tweaking, but I know you'll get there. If any others want to chime in with settings they have found useful, please feel free. Have fun.

[cpatte7372]

Hey Duane,

Thanks for the encouraging words.

You're quite right about me almost nailing down my trading system. I'm using Dr. Alexander Elder's 'Triple Screen System' with MACD Impulse. It appears to be working wonders.

Thanks again mate.

Cheers

Carlton

[cpatte7372]

BTW Duane,

By average trading volume, I actually meant in terms the number of shares traded on a daily average. Some say, I shouldn't consider stocks that trade with less than 5000K shares on average per day.

Thanks

Carlton

[cpatte7372]

I meant 5K, not 5000K

[DuaneG]

Hi Carlton,

One theory I have heard of is not holding more than 1% of the total daily volume in any stock as it can make getting in and out of the trade somewhat difficult without affecting the price. Some traders place minimum volume limits to avoid getting involved with thin stocks, but as always....it depends on the strategy and the trader. Hope this helps.

[soylent]

Hi Carlton --

5K is very, very thin...

For 'swings' that I look @ I like 1-2MILLION minimum... The smaller stuff (50K-200K) can have violent moves that jump / fall 20% in one day.

Still, if you see avg volume over 50K, it's 'respectable'. But, I find I get burned on those when some bozo drops their entire load '@ market' and tanks the stock. Which trips stops, which completely messes up my calculations as the stops cascade and the price drops 20%...

These stocks usuually bounce quickly but I get tired of watching the mood swings on them.

-c

[cpatte7372]

Duane,

Your comments really help.

Cheers mate.

Carlton

[cpatte7372]

Soylent,

Thats a great insight.

Cheers dude.

Carlton