Michael N. Kahn, CMT
Volume is said to be the fuel that drives market moves. The more shares or contracts that change hands, the more committed the buyers and sellers and the more important that period’s trading becomes.
Think of it this way—the more active investors on both sides become, the more the market will represent mass psychology and the more efficient it will become in establishing value.
A thin market can move simply because there is no natural buffer against small shocks. For example, a thinly traded company may be rumored to have ...