Volume Definition Volume is the number of shares traded over a period of time For example, each daily candle contains the number of shares traded on that day Wordy definition👇

When Bill sells 1 share of $TSLA to Sally that counts as 1 volume

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Each of these bars at the bottom of your screen represents the volume for one period of time If I'm on a daily chart, one bar represents the volume from one day If I'm on a 5 min chart, one bar represents the volume from one 5 min candle

Why Volume Is Important Traders can determine the significance of price action based on volume. We can pair it with other indicators to determine strength, reversals, trend, etc

Volume is also real time, or very close, which is different than many other trading indicators Many indicators lag, but volume can be seen as it's happening, which is huge for entering & exiting trades

The importance of knowing how many shares are being bought/sold is IMMENSE Just think about it... we are getting to see the current strength dynamic between buyers & sellers (after we analyze price paired with volume)

How Traders Use Volume: 1) Volume Price Analysis 2) Volume Surges 2) Volume Trends 3) Confirmation

Volume Price Analysis (VPA) is the process of using both volume and price action to make inferences about the future price (I have posted a ton of education about VPA)

Volume Price Analysis combines candle size & formation with volume Large volume = significant candle Large volume + large body = strong candle Small volume + large body = weak candle I am constantly using VPA to analyze price action & charts

Volume Surges occur when a candle has much higher volume than the previous candles Volume surges indicate significant action. We can extract information about the trend/strength from the candles attached to these volume surges

Volume Trends are formed when the overall volume is declining or increasing Volume Trends tell us information about the current price trend. We can also wait for a break of the Volume Trend

Confirmation is one of the best ways to use volume If a move happens with high volume, that move is confirmed. If a strong move happens with low volume, that move is not confirmed

Volume can also be used to confirm losses when a setup fails For example, If I enter on a low volume pullback & then we see a higher volume candle against me, that confirms the pullback is more likely to be a reversal

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