What is volume in trading?
In one line: Volume is how many shares or contracts changed hands in a period — shown as bars under each candle on most charts.
A simple example
Under most charts there's a row of bars. Each bar lines up with one candle and shows how much traded during it.
Say a stock usually trades about 2 million shares a day. Today it pushes through resistance at $25 and trades 6 million — three times normal.
That tells you far more people took part today. A move with heavy volume behind it has more traders involved than the same move on a quiet day.
Why it matters
Volume is a clue about interest:
- A breakout on high volume shows lots of traders acted on it.
- A breakout on very low volume can mean few people care, which some traders treat as a warning.
- Busy markets fill orders more easily. Plenty of buyers and sellers usually means a tighter spread and less slippage. That's part of what liquidity means.
Our guide on breakout vs fakeout shows how volume fits in with the body-close test.
Volume in forex
Forex has no single central exchange, so there's no true total volume. Charts usually show tick volume instead — how many times the price changed. It's a rough stand-in for activity, not a count of money traded.
A common mistake
Reading a volume bar as a direction. A huge bar means a lot traded. It doesn't say whether buyers or sellers won. Big volume shows up at tops, bottoms and breakouts alike.
Read volume next to the candle it sits under. A large bar under a strong close above a level means something different from a large bar under a long wick that snapped back.
For more on reading the whole chart, see how to read stock charts.
Questions
What is considered high volume?
Compare with the market's own normal. Twice the average is high for one stock and ordinary for another.
Why is volume highest at the open and close?
Many traders and funds act at the start and end of the session, so US stock volume is often heaviest near 9:30 am and 4:00 pm ET.
Does volume predict price?
No. It shows how much activity there was, which can add context. It doesn't tell you what comes next.
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