If you are a devotee of technical analysis then traded value is a term which you will always hear from the experts. Most experts take traded value in consideration to find the market trends. Let’s check out what is traded value in stock market with an example.
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What is Traded Value in Stock Market?
Trade in value meaning is the total amount of buy and sell trades taken place at a time. It can be majored at any time but mostly it is taken into account on a day to day basis to track the overall stock market trend or a particular stock trend.
Thin traded value in the overall market can give an indication that people are not confident about the trend. Whereas heavy traded value in the overall market can give an indication that people are confident about the trend whether it is bullish or bearish.
It can also be used to show daily activities of anyone. Like how much trades an individual does in a day, the total amount of buy and sell is called total traded value by an individual.
Example of Trade Value Meaning
Trade value meaning can be understand by this example:
Suppose you enter a stock at INR 560 and purchase 250 shares. The stock has hit your target of INR 585 by 2 pm and you have sold these 250 shares at 585 per share. So your traded value will be :
Buying value : 560 x 250= 1,40,000
Selling value : 585 x 250= 1,46,250
Total Traded value is 140000 + 146250 = 2,86,250
This is the total trade in value meaning in terms of an individual trade. Many people do multiple trades within a day so the total of all the trades are considered a total traded value.
Where can you find total traded value data of stock market?
You can find the daily trading data of stock market on NSE by clicking here
Importance
If you are thinking what is trade value Importance, It is very important factor while doing analysis :
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Fundamental Analysis
For all market players, daily total value is critical. This is due to the ease with which a counter with a little trading value can be manipulated (mostly called an illiquid counter).
Long-term investors, particularly institutional investors such as mutual funds, frequently steer clear of companies with insufficient trading value.
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Technical Analysis
Technical analysis tools are only useful if the share has a big number of investors because they are developed to monitor the collective psychology of investors. That implies that before investing in any company, investors must ensure that the trading activity is large enough.
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Average value
Value, unlike stock prices, can fluctuate dramatically in a brief length of time. On one day, a counter’s traded turnover may be merely a few hundred shares, but on another day, it may be in the lakhs.
Traders can get a good understanding of the volatility of a counter by utilising an average, such as a 10-day average. In both the value and volume charts, the 10 day average is fairly stable.
Other related term to trade value meaning
Here is the other related term to it:
Traded volume
The quantity of stocks or contracts exchanged in a counter during a specific time period is known as traded volume. As a result, the volume chart is drawn based on the time period chosen.
For instance, an hourly chart will display the overall volume traded in one hour, a daily chart will display volume for the day, a weekly chart will display volume for the full week, and so on.
The traded value is computed by multiplying the volume by the price of the stock. Using volume or value won’t make much of a difference because most traders utilize short term charts.
When using long-term charts, although, value provides a better indication.
Example
If you examine the dependence chart, you’ll notice that the traded value has increased over time while the traded volume has remained quite constant. Additional benefit of value is that it handles events including a split or bonus in the counter properly.
Suppose that after a 1:1 bonus, the price of a stock plummeted from Rs 2100 to Rs 1050. People may buy twice as many shares now that the price has halved, so an increase in volume from 1 lakh to 2 lakh stocks per day should be considered reasonable.
In the previous case, the traded value (INR. 4 crore) will stay the same. Nevertheless, in volume charts, this will show as a jump.’
Conclusion
Traded Values can help you in trading and also investing. However, if you need to do other analysis as well with it to find the right stock for you.
This is all from our side regarding what is traded value in stock market? Let us know your views about trade value meaning in the comment section.
Other related interesting blogs: What is Traded Value ?
Frequently Asked Questions About What is Trade in Value?
What does trade value mean in stocks?
The price per unit of a stock multiplied by the volume traded is known as the Trade Value.
What is total traded value?
The entire number of stocks exchanged, both local and foreign, multiplied by their corresponding matching values equals the value of stocks traded.The data includes both companies that have been authorized to list and those that have been permitted to trade.
How is trade value calculated?
Simply multiply the transaction size by the open price and the quantity of transactions to get the trading value.
Is high trading volume good?
A stock that is rising on large volume has more potential to be a long trend. When more money is influencing the price of a stock, it is logical to assume that there is more demand for that asset. The chances of a modest quantity of money affecting the stock price being durable are lower.
What is traded value Zerodha?
The total of the buy and sell values of trading transactions is known as trade value.
