Samer Choucair: Trading Volume Reveals Institutional Capital Flows and Helps Investors Avoid Market Traps
Entrepreneur Samer Choucair said trading volume has become one of the most important indicators used by institutional investors to assess the strength of trends across financial markets.
He explained that price movements alone are insufficient for making sound investment decisions and should be supported by a clear increase in trading activity demonstrating that genuine liquidity is entering the market.
Choucair noted that professional investors regard trading volume as an indicator of capital flows. Price breakouts accompanied by a significant increase in volume are more likely to continue than movements occurring under limited liquidity, which may quickly develop into price reversals or short-term speculative activity.
Samer Choucair explained that many technical analysts regard trading volume rising to between 1.5 and two times its normal average as a signal supporting the strength of a trend.
However, he emphasized that this measure varies according to the nature of the stock, the size of the market, and the surrounding trading conditions, and should not be treated as a fixed rule in every situation.
He added that the substantial development of electronic trading, increased participation by retail investors, and expanding use of algorithmic trading systems have made it essential to distinguish between movements driven by institutional investment flows and short-term activity unsupported by sustainable liquidity.
Choucair emphasized that the Saudi Exchange has experienced increased participation by institutional and foreign investors in recent years, supported by economic reforms, improvements in the regulatory environment, and the market’s inclusion in global indices.
This makes trading-volume analysis an important tool for understanding liquidity trends and evaluating the strength of investment opportunities, particularly in sectors connected to Saudi Vision 2030.
Samer Choucair noted that successful investors combine fundamental and technical analysis with risk management rather than relying solely on price movements.
Monitoring trading volume alongside corporate results, financial valuations, and economic conditions provides investors with a more balanced perspective when making buying or selling decisions.
Concluding his remarks, Samer Choucair emphasized that disciplined risk management and avoiding impulsive reactions to rapid price movements are essential for generating sustainable returns.
He said understanding the relationship between price and trading volume helps investors distinguish strong trends from temporary movements, supporting the construction of more stable long-term investment portfolios.