Money Flow shows dollar volume liquidity and is a clearer view of stocks showing monetary interest and reduces the distraction of high volume on low priced stocks. While volume is interesting, it is not as clear of indication where people are putting their capital to work.
High dollar volume liquidity is typically a positive sign, meaning there is significant interest in the stock. However, some investors that employ strategies such as trying to get into a stock before it becomes popular, might prefer stocks with low dollar volume liquidity. A stock can also have high dollar volume while it is falling in value, mainly because falling prices can result in panic selling, hitting stops, or forced liquidations which drive up the volume.
Institutions and investors that place large bets on individual stocks or ETFs will do so in equities which have large dollar volume liquidity, because if market changes they want to be able to exit the position as close to market value as possible. Trying to enter or exit a large position in a low dollar volume stock could result in the order moving the price substantially, which is obviously undesirable. Large orders in low-volume stocks tend to result in what is known as slippage and prevents getting the maximum profit.
Liquidity is a valuable capability across the spectrum of equities both large and small. For higher market cap symbols, liquidity will help gain insight into dollar velocity over time to confirm momentum, for lower priced stocks in the $0-$5 range you will be able to better discern meaningful inflows as well as liquidity for placing larger trades with MOMO .
MOMO Pro includes this high-grade feature to help understand liquidity momentum and is found in the Discovery Pro view.
Still don't have MOMO Pro yet? Learn more at Mometic.com
We are dedicated to making financial data more accessible. MOMO Pro is an integrated scanner and screener designed for any device.
//Profit from Momentum with MOMO Pro