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Volume

Volume is a term used to describe the amount of units traded in a particular stock, future, commodity, or any security that has its own price series.

It’s a significant indicator because it helps us to understand the levels of demand and supply in a particular security. Falling prices are generally an indication of reduced demand for a stock and vice versa. Using a volume bar chart, you can start to make other interpretations as well. In general, a move may not last too long if there’s no decent volume to go with it. On the other hand, where a move is accompanied by high and increasing volume, the move is more likely to be one that is sustainable. Volume makes prices move.


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