ATFXAnalysis: What's wrong with a high turnover rate but a low volume ratio? Stay away from investment fraud

The turnover rate of stocks often represents the turnover rate of stocks over a certain period of time, in other words, the frequency of buying and selling stocks over a period of time. In terms of turnover rate, the higher the turnover rate, the more active the stock is. The volume ratio reflects the current trading volume and the past5The closeness of daily average trading volume. So what happens when the stock turnover rate is high and the volume ratio is small?Let's learn more together.

What's the difference between high turnover rate and low volume ratio?

A high turnover rate but low volume ratio often means that the high turnover rate of the stock has been ongoing for several days, and the trading volume on that day is not significantly different from the market heat of the previous days. Often, this situation occurs during the process of stock price rise and during high sideways trading. In addition, this situation may also occur when stocks are hyped up by hot money, and in stock investment, only a high turnover rate can attract other hot money and retail investors to follow suit.

From the perspective of quantity ratio, when the value is1When it is in an equilibrium state, it indicates that the current trading volume is different from the past5The average day is the same;less than1When, it means it's lower than in the past5Average trading volume of days;greater than1At that time, it was higher than in the past5Average trading volume per day.

In fact, according to the principle of stock trading, it is often the day when the stock turnover rate becomes higher and higher, and the natural volume ratio should also become higher and higher. However, due to the fact that the change in volume ratio is smaller than the turnover rate, there may be a situation where the turnover rate is high but the volume ratio is small.

Overall, having a high turnover rate and a low volume ratio is actually a good market trend, which often means that the stock still has some room for improvement.