Volume, or trading volume, is the number of units traded in a market during a given time. It is a measurement of the number of individual units of an asset that changed hands during that period.
Every transaction includes a buyer and a seller. At the point when they agree at a specific price, the transaction is recorded by the facilitating exchange. This data is then used to ascertain the trading volume.
Trading volume can be designated in any trading asset, like stocks, bonds, fiat currencies or cryptocurrencies. For instance, assuming Alice sells Bob 5 BNB for 20 USD each, the volume of that transaction can be either 100 USD, or 5 BNB, contingent upon what the trading volume is designated in.
This likewise means that for a stock, for instance, the trading volume alludes to the number of individual stocks that were traded during the measured period. So on the off chance that 100 shares are traded in one trading day, the daily volume of the stock is 100 shares.
Traders will generally involve the volume indicator as an endeavor to gain a better comprehension of the strength of a given trend. Assuming volatility in price is joined by high trading volume, it very well might be said that the price move has greater legitimacy. On the other hand, on the off chance that a price move is joined by low trading volume, it might show weakness of the underlying trend.
Price levels with generally high volume can likewise give traders an indication in regards to where the best entry and exit points could be situated for a specific trade setup.
Commonly, a rising market ought to see expanding volume, showing continuous buyer interest to keep pushing prices higher. Expanding volume in a downtrend may demonstrate expanding sell pressure.
Inversions, exhaustion moves, and sharp changes in price course are in many cases joined by a high volume spike, as these will generally be the times when the highest amount of buyers and sellers are active in the market.
Volume indicators frequently likewise consolidate a moving average, measuring the volume of the candles in a given period and delivering an average. This gives traders an extra device to measure the strength of the current market trend.
- Generally securities with more daily volume are more liquid than those without, since they are more "active".
- The higher the volume during a price move, the more huge the move and the lower the volume during a price move, the less critical the move.
- Volume is an important indicator in technical analysis since it is utilized to measure the relative significance of a market move.
- Volume is the number of shares of a security traded during a given period of time.