what is volume 
volume is the amount of an asset or security that changes hands over some period of time often over the course of a trading day for instance a stock s trading volume refers to the number of shares traded between its daily open and close trading volume and changes in volume over the course of time are important inputs for technical traders investopedia michela buttignolunderstanding volumeall of the shares of every transaction that takes place between a buyer and seller of a security contributes to the total volume count of that security on that day each transaction or trade occurs whenever a buyer and a seller agree to exchange shares for cash volume includes all the share involved in the transactions for example if five transactions occurred in one day and each transaction involved 100 shares the trading volume for that day would be 500 each exchange tracks its trading volume s and provides data to traders and investors for free or a subscription fee trade volume numbers are reported as often as once an hour throughout the current trading day but reported daily and hourly trade volumes are estimates final trading volume figures are reported the following day investors may also follow a security s tick volume or the number of changes in a contract s price as a surrogate for trade volume since prices tend to change more frequently with a higher trade volume volume tells traders about a market s activity and liquidity higher trade volumes for a specific security means higher liquidity better order execution and a more active market for connecting buyers and sellers when investors feel hesitant about the stock market s direction futures trading volume tends to increase which often causes options and futures on specified securities to trade more actively volume overall tends to be higher near the market s opening and closing times and on mondays and fridays it tends to be lower at lunchtime and before a holiday volume in technical analysissome investors use technical analysis a strategy that uses changes in stock price to make decisions about buying or selling a stock technical analysts are primarily looking for entry and exit price points volume levels are important because they provide clues to where the best entry and exit points might be volume is an important indicator in technical analysis because it measures the relative significance of any market move if the market moves a large amount during a given period then the strength of that movement either gains credibility or is viewed with skepticism based on the volume observed the higher the volume during the price move the more significant the move is considered in this form of analysis conversely if the volume is low then the move is viewed with less significance volume is one of the most important measures of the strength of a security for traders and technical analysts from an auction perspective when buyers and sellers become particularly active at a specific price it means there is a high volume analysts use bar charts to quickly determine trading volume bar charts also make it easier to identify trends in volume when the bars on a bar chart are higher than average it s a sign of high volume or strength at a particular market price by examining bar charts analysts can use volume as a way to confirm a price movement if volume increases when the price moves up or down it is considered a price movement with strength if traders want to confirm a reversal on a level of support or floor they look for high buying volume conversely if traders want to confirm a break in the level of support they look for low volume from buyers to confirm a reversal on a level of resistance or ceiling traders look for high selling volume conversely to confirm a break in the level of resistance they look for high volume from buyers other considerationsrecently high frequency traders hft and index funds have become major contributors to trading volume statistics in u s markets many trades are conducted by high frequency algorithmic traders which are automated trading platforms programmed to make trades by 2030 algorithmic trading is expected to gain a market size of 41 9 billion 1volume may or may not be as significant if automated trading takes over the market according to various reports between 60 and 80 of daily trading volume is conducted by automation if this is true it could change the way traders view volume 23