Ive been trying to look onn google but there isnt a good definition on it. Does it mean the entire float volume has been traded repeatedly throughout the day. So for an example if the stock has a float of 4 mil and within a time frame of 20 mins its been traded 20 mil would it mean the float has been rotated 5 times??? Im so confused please help me.
I never heard that term. "Float" usually means "all of the shares issued and outstanding in the market"... all of which could theortically be involved in current trading. As a practical matter, however, only a portion of those shares are usually "in play". The float could be quite large compared to the handle, depending upon who owns the shares. Knowing the float usually isn't important or valuable in trading. Knowing the handle could be. "Handle" is the daily volume. If you're trading size, you need to know the "average handle" so that your play isn't too big a part of the action. I've heard a "rule of thumb" about not trading more than 2% of the average handle. That's too big for my tastes. 0.5% is more conservative.
The theory is that since if the stock is up a lot and the float has rotated, its easier to move the stock higher as its likely that most people that went long the stock before the it was up a lot, has sold into that rotation (to lock in gains). so you have a 'new' shareholder base that will be unwilling to sell, until they have significant open profits