What Is Volume and Why It Matters in Trading ?
When you trade in the stock market, one word you will hear again and again is “Volume.” But what exactly is volume? And why do traders give it so much importance? Let’s understand this in the simplest way.
What Is Volume? (In Simple Words)
Volume means the total number of shares bought and sold during a specific time period.
Example:
If 10,00,000 shares of Reliance are traded in one day, then the daily
volume is
10,00,000.
So, volume shows how active a stock is.
High volume = many buyers and sellers
Low volume = fewer buyers and sellers
Why Volume Matters in Trading?
- Volume Shows Market Strength
- Helps Identify Trend Reversal
- Confirms Breakouts
- Improves Entry and Exit Decisions
- Shows Real Interest in the Stock
If price goes up with high volume, it
means the move is strong.
If price goes up with low volume, it
may be a weak or fake move.
High volume = strong trend
Low volume = weak trend
Volume helps you understand if a trend is about to change.
Example:
If a stock is falling for many days but suddenly
shows big volume with upward movement,
it may indicate a reversal.
A breakout is only trusted when volume is
high.
• Breakout with high volume = genuine
• Breakout with low volume = false breakout (price may fall again)
Volume tells you the right time to enter or exit.
• High volume near support = strong buying
• High volume near resistance = strong selling
This helps you find perfect entry
points and safe exits.
If volume is increasing steadily, it shows that big players are interested.
If volume is decreasing, it shows interest
is reducing.
This helps you filter the best stocks for trading.
Summary (Quick Points)
• Volume = number of shares traded
• High volume means strong pactivity
• Confirms trend strength
• Helps in catching reversals
• Confirms breakouts
• Protects from traps
• Helps in perfect entries and exits
Final Words
If you want to understand price action, breakouts, trend strength, and market psychology, then volume is one of the most powerful tools you can use. A good trader always checks volume before taking a trade.
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