Trading Volume

Trading volume is the total amount of an asset that is bought and sold within a specific period of time in the financial market.

📈 Importance of trading volume

1. Confirming price trends
   • Price rises + volume increases → a strong and reliable uptrend
   • Price rises + volume decreases → a weak trend, possible reversal
2. Identifying market reversals
   • Sudden spikes in volume may indicate major news or new capital inflows
3. Assessing liquidity
   • High volume → easy to enter and exit trades, lower spreads
   • Low volume → harder to trade, higher risk

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Short conclusion

Trading volume reflects the strength of the market and the level of capital participation.
Price shows where the market is going, while volume shows how strong the move is.