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Total volumeThe total number of shares or contracts traded on national and regional exchanges in a stock, bond, commodity, future, or option on a certain day.Total volume Similar MatchesPrice volume relationshipPrice volume relationshipA relationship espoused by some technical analysts that signals continuing rises or falls in security prices that are related to changes in volume traded. Volume dataVolume dataSee 'volume'. VolumeVolumeThe number of shares traded on a stock exchange for a given period, also known as market turnover. Low volume is sometimes referred to as 'thin' trading.The significance of volume, particularly for technical traders, is that the higher it is, the more reliable the closing price is as a barometer of market sentiment.Volume is considered significant because when a large volume of shares is traded you can be fairly sure that the price on the day is 'accurate' since it represents a consensus between many buyers and sellers.Conversely, when the volume is low the price has been set by only a small number of individuals or organisations and may not be totally representative of the true 'value'.For most technical analysts, volume is used as corroborative evidence of a trend, rather than primary evidence. There are five basic rules:When prices are going up and the volume is increasing then the trend will stay in force and prices will continue to rise.When prices are going up and the volume is decreasing the trend is unlikely to continue and prices will either increase at a slower rate or start to fall.When prices are decreasing and volume is increasing then the trend will continue and prices will fall further.When prices are decreasing and the volume is also decreasing then the trend is unlikely to continue and the decline in prices will slow down or they will start to increase.When volume is consistent, not rising or falling, then the effect on prices is neutral and you need to find some other way of backing up your trend analysis. Trading volumeTrading volumeThe number of shares transacted every day. As there is a seller for every buyer, one can think of the trading volume as half of the number of shares transacted. That is, if A sells 100 shares to B, the volume is 100 shares. Volume discountVolume discountA reduction in price based on the purchase of a large quantity. Further SuggestionsVolume deletedvolume weighted average price |
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