Volume is the number of shares, coins or contracts traded in a period. It shows how much participation is behind a price move. Price tells you what happened; volume tells you how strongly traders believed in it. It works the same way on the Pakistan Stock Exchange, crypto and other markets where volume data is available.
Where to find volume
Most charting platforms show volume as bars under the price chart. A taller bar means more trading in that period. Many traders also add a moving average of volume to see whether today’s activity is above or below normal.
The basic ideas
- Rising price with rising volume: buyers are committed; the move has support.
- Rising price with falling volume: the rally may be running out of buyers.
- Falling price with high volume: strong selling pressure.
- Very high volume after a long move: can mark exhaustion, where the last buyers or sellers finally act.
Volume and breakouts
When price breaks above resistance or out of a chart pattern, traders look at volume. A breakout on clearly higher-than-usual volume is generally treated as more convincing than one on low volume, which is more likely to fail.
Things to keep in mind
- Compare volume with the same share’s own normal level, not with other shares.
- Thinly traded shares can show sudden spikes from a single large order.
- In forex, there is no single central volume figure, so platforms show estimates.
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This article is for education only and is not investment advice. Trading shares, cryptocurrencies, forex and other markets involves risk, including the loss of capital.