What Is Trade Volume?
Trade volume is the total number of shares or contracts traded in a given period. It is an important indicator for investors and traders to gauge market sentiment, as it can provide insight into how actively a security is being bought and sold. Trade volume also helps identify potential support and resistance levels, which are key areas where buyers may step in to buy more stock or sellers may enter the market to sell their holdings. High trade volumes indicate that there is strong interest in a particular asset while low trade volumes suggest that there isn’t much activity around the asset.
In addition to providing information about investor sentiment, high trade volumes can be used by technical analysts as an indication of future price movements. If large amounts of trading occur at certain prices then these prices become significant support or resistance levels; if enough buying occurs at one level then this could lead to further increases in price due to increased demand from new buyers entering the market. Conversely, if selling pressure becomes too great then this could cause prices to fall back down again due to decreased demand from existing holders exiting their positions.