Volume

Name Type Prerequisite Use Cases
Volume (V) Volume Price & Volume Gauges market activity and validates the strength of price moves.

Definition

Volume represents the total number of shares or contracts traded for a specified security during a specified period of time. It is a fundamental measure of the intensity of trading activity.

Special cases

  • Maximum possible value: Unbounded
  • Minimum possible value: 0
  • Behavior: Shows the absolute number of shares/contracts traded per period.

Visualization

Volume (V)

Trading Significance

  1. Confirmation: Volume confirms trends; a rising market should have rising volume.

  2. Weakness: A rising market with falling volume may indicate valid price action but a lack of conviction (divergence).