Trading glossary
Trading volume is the total quantity of a security traded over a period. Learn how volume is measured and why analysts watch it, neutrally explained.
Trading volume counts how much of an asset changed hands over a chosen period, such as a day or an hour. It is usually shown as bars beneath a price chart. Volume reflects participation and activity in a market and is one of the most basic pieces of information alongside price.
Volume is often used to describe how much conviction accompanied a price move. A move on unusually high volume is frequently discussed as showing broad participation, while a move on low volume is described as thin. Volume can also be compared with its own recent average to judge whether activity is elevated.
Volume is descriptive information, not a signal by itself. High volume does not indicate which direction price will go, and interpretations differ across markets and timeframes. Reported figures can also vary between data sources and venues. Analysts generally read volume together with price rather than in isolation.
No. High volume shows heavy participation but does not indicate direction. Prices can rise or fall on high volume. Volume describes how much trading occurred, not what happens next.
Volume measures how much traded over a period, while liquidity describes how easily an asset can be bought or sold without moving its price. Active markets often show both, but they are distinct concepts.