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Portfolio123 » List all forums » Forum: Simulations and Portfolios » Thread: volume buy rules |
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jbarnh
Advanced Member
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This is the first time I have used the community thread so here goes. I do not completly understand the volume buy rules. I want to limit the sims I run to say, buy only stocks that have a 10 day average daily volume of greater than 50000 shares. I have been using a rule of AvgVol(10)>50000 and I keep getting stocks that have a daily volume of less than 50000 shares allowed into the sim. I do not want a percentage because as the sim grows in size the volume on the sim criteria will be buying larger vol stocks to compensate. I also tried the AvgDailyTot(10)>50000, but that didnt work either. What am I doing wrong. I just want to limit the stocks that the sim uses to more than say 50000 shares average daily volume. I could use some help |
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DennyHalwes
Advanced Member UNITED STATES Joined: Apr 28, 2004 Posts: 1532 Status: Offline |
jbarnh, The rules you are using are the correct ones. However, many times a stock’s 10 day average volume is much higher than it's normal volume because there is 1 or 2 days out of the last 10 that the volume was much higher than normal, thus making a higher than normal average. Look at the daily volume for the 10 days prior to the recommended buy date to see what is happening. I always check the volume of a recommended stock before I buy to see if this is a problem. If I see a few days that are way above the normal daily volume, and the normal volume is below what I want to buy into, I reject the recommendation and get a new one. Normally you can buy 5% (or less) of the daily average without having much of a problem with the price or liquidity when you are ready to sell. If you use the AvgDailyTot(10)> xxxxx rule be sure to use 20 times (or more) the $ amount you want to spend per stock for the value xxxxx. Denny  ---------------------------------------- "The significant problems we face cannot be solved at the same level of thinking that we were at when we created them". Albert Einstein |
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Re: volume buy rules
