Let's imagine this scenario:
You're a novice investor. You hear good things about a company. You see the stock price at 0.25 and you think to yourself "wow I can make a lot of money if this goes up soon and the stock is just 0.25. I'll buy 50,000 shares at $12,500 and make a ton of money. Then a month or two goes by and the stock fluctuates and doesn't skyrocket. As a matter fact, it goes down to as low as 0.17 but starts to head back up to 0.25 to where you bought it. But now it starts to fade to 0.235. You think to yourself, "I don't know why it's going down. It seems like such a sure thing. I'm scare and I can't take the stress of watching the price change everyday. I'm going to sell all 50,000 shares at whatever price someone is willing to buy it for."
On this day, this hypothetical investor would have accounted for half of the day's total volume. This individual would have had an outsize influence on the share price. This individual with a small investment of $12,500 would have influence the day's price simply because they were scare that they had a paper loss of just $750.
