How To Use Volume As A Trading Guide

Welcome back to the Rude Awakening for Wednesday, February 24, 2021.

A bit delayed due to some technical difficulties today…

We have an interesting trading idea for you today that focuses on volume.

And the best way to share the idea of trading stocks based on volume is by sharing some volume leaders for yesterday’s market…

Using Volume As A Trading Guide

Now, volume does a few important things for traders…

    1. It helps us define the existence of a trend. Because there’s a lot of volume, you know that’s where the market action is.
    2. It can also help us confirm the continuance of a trend. When you see volume ramping as a stock moves, you know there’s confirmation and a confidence behind that move.
    3. Lastly, volume can also help us find the reversal of a trend. When volume has dried up, it could be a good indicator of a reversal. As any experienced trader knows, identifying trend reversals is just as important as finding those spikes!

This Week’s Volume Leaders

The first stock I want to share with you from yesterday is (CCL).

This was one of the top volume traded stocks on the market yesterday, and is a great pick to keep on your watch list. (CCL) traded 115 million shares yesterday, and is really starting to ramp up in volume.

Another stock to keep your eye on is (AAL). This one is also experiencing a massive move in volume, with 78 million shares traded yesterday.

A perennial stock to watch is (TSLA). (TSLA) has gone through a period of declining volume in the past, and last year as the stock was ebbing and flowing so was the volume. But at 66 million shares yesterday, it’s starting to ramp up in volume again.

Lastly in volume leaders is (AMP). BE careful with this one, as it’s unpredictable and has gone from $2.50 a share to $20.00 a share rather quickly. All the same, the volume is starting to ramp up now and it traded 264 million shares in the market place yesterday.

I often get questions about how to find the right stocks to trade, and my best advice is to look at volume.

It’s a great starting point for any kind of trader.

See you tomorrow.


Scott Stewart

Scott Stewart
Editor, Rude Awakening

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