As an online trader, your aim is to capture any change in the stock prices. In order to do so, you must collect as much information and data about the shares you are interested in, including what quantity of the particular trade is being traded.
The volume of any stock provides you another dimension of the market that enables you to measure the criticality of daily market change in the price of any stock you are interested in. Not only does it allow you to measure the raw quantity of the stock and indices, but you can additionally create various indicators to enable you to predict the moment of the stock’s volume. You can always learn from reliable sources such as Global CTB Review.
What is Volume
Volume represents the total number of stocks purchased and sold during a single trading session or a specific time period. You must remember the quantity of shares related to a certain stock or ETF that are bought must be equal to the numbers of shares sold.
Each trade transaction taking place within a specific trading session generates its volume count. If your total of 10 trades while selling and buying 100 stock shares, then you would have added a total of 2000 shares to the volume.
Where to Find Stock Volume
You can find the volume of the stock on the exchange that was used for trading them. You can also find historical volume data and relevant information in the form of graphical representation as well as in tabular form.
Why is Volume Important
The volume of the stock defines pieces of information about a trade that a price will not be able to relay to the online traders. Since trading volume demonstrates the number of stock shares traded in a given trading session or a time period; therefore, it is an indicator of the overall activity of a stock.
What is more important for you is to learn how to determine whether the volume you are looking at is heavy, average volume, or a low volume compared to the volume from the previous trading sessions or periods.
Several scenarios can occur while prices continue to fluctuate and move in upward or lower direction, and the stock volume can give you crucial clues to determine a well-calculated next market move. Some of such scenarios are mentioned below for your reference:
- Price fall on heavy stock volume
- Price rise on heavy stock volume
- Price rise on an average stock volume
- Price fall on an average stock volume
- Price rise in a low stock volume
- Price fall in a low stock volume
- Price remains unchanged in case of high stock volume
- Prices remain unchanged in case of low stock volume
Each of the above mentioned scenarios shall be evaluated, especially when you are considering entering a trading opportunity, or you are already managing a position in stock trade.
Types of Volume Studies
Volumes used in conjunction with prices of the stock help determine the future trend and direction of any stock. There are three main indicators that can help you incorporate volume as one of the trading indicators they are
- Relate volume
- Advanced-Deline Volume
- Put/Call Ratio
Stock volume is a vital piece of information to describe your trading activity and demonstrate the price change and momentum behind it. If you wish to observe detailed scenarios of how stock volume performs, you can get help from online trading platforms such as Global CTB Review.
You can formulate various case studies to describe the stock volume and momentum and how to use them in conjunction with each other.