Volume
The number of shares, contracts or units traded during a period.
Also called: traded volume · turnover
In plain language
Volume measures participation. A move on heavy volume involved many participants; the same move on thin volume involved few and is easier to reverse.
It is most useful as confirmation. A breakout on strong volume carries far more weight than an identical break on a quiet afternoon.
Volume has strong time-of-day and seasonal patterns. Comparing a lunchtime hour to the opening hour without adjusting for that is misleading.
Why it matters
Volume is a direct read on available liquidity, which determines how well your orders will fill and whether your stop can be executed near its price.
Common mistakes
- Comparing raw volume across sessions with very different baselines.
- Reading high volume as bullish. Every trade has a buyer and a seller.
Keep exploring
These concepts are connected. Understanding one usually makes the next one easier.
How easily an asset can be bought or sold without moving its price.
When price moves decisively beyond an established support or resistance level.
The average price over a session, weighted by the volume traded at each price.
A histogram showing how much volume traded at each price level rather than in each period.
How much and how quickly an asset’s price moves over a given period.