Turnover definition
Turnover
Turnover is the total monetary value of all executed transactions in a given time period, otherwise known as trading volume. Turnover represents how much money is being traded in a market. For example, forex turnover is calculated monthly with the use of volume histograms.
What does high and low turnover indicate?
High turnover indicates many traders in the market and likely high liquidity. High liquidity is often correlated to tighter spreads and more traders on the market. Generally, when turnover increases, the market price is likely to continue trending in the same direction.
Low turnover indicates fewer buyers and sellers active in the market, which means lower liquidity. When trading markets with low liquidity you risk getting stuck in positions and being unable to find someone to trade at your desired price. If the turnover for the market is declining, the prevailing trend may also be close to a reversal.