Volume is the total quantity of a particular security traded during trading hours on a given day or per transaction.
For a given security, higher day trading volumes are considered more positive than the lower trading volumes because they mean more liquidity and better order execution.
Volume tends to be highest near the market day open, market day close and also on the start of the week and last day of the week. Volume of a trade ( Trade Volume) is the measurement of the market’s activity and liquidity during a set period of time. This is measured on stocks, bonds, options, contracts, future contracts and all types of commodities.
Traders use volume levels to decide on timing of their transaction. When the price of a security is changing fast then it means that Trading Volume is usually higher.
Candlestick charts primarily highlight price movements of the security. Volume indicators keep track of all the transactions in any given period.
Trades usually apply volume indicators on the price chart of the security to analyze patterns. On the candlestick chart, volume indicators are usually displayed at the bottom as a histogram. Each bar shows the total volume traded for a given time period with a number.
Practice Volume – Intermediate