Trading Volume

Trading volume is the number of shares or contracts traded over a given period. It measures how much activity and conviction is behind a price move. High volume signals strong participation, while low volume suggests weak interest.

Use volume to confirm price moves: a breakout on heavy volume is more convincing than one on light volume, which may fizzle. Rising volume on up days and falling volume on down days can indicate healthy demand. Volume spikes often accompany major news, reversals, or the start of new trends.

If a stock breaks above resistance on volume three times its daily average, the surge suggests strong conviction and a higher chance the breakout holds, compared with a quiet, low-volume move.