What is Volume?
Volume is the total number of shares or contracts traded for a security during a given period, representing the intensity of buying and selling activity.
Volume Explained
Volume is one of the most important confirming indicators. A price move accompanied by high volume is more likely to be sustainable than one on low volume. Volume precedes price — unusual volume activity often signals that smart money is accumulating or distributing before a significant move.
Real-World Example
A stock breaks above resistance at $100 on volume that's 3x the 50-day average. This high-volume breakout is considered more reliable and likely to hold compared to a breakout on below-average volume, which frequently fails.
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