📊 What is Trading Volume?
In short
When you open any chart on a trading platform, you will notice colored bars below the chart representing trading volume, but many beginners do not know its importance or how to use it.
1️⃣ What is Trading Volume?
Trading volume is the total amount of currency that has been bought and sold over a specific period of time.
For example: If 1000 Bitcoins were traded in one day, that is the trading volume for that day.
2️⃣ How is it displayed on the chart?
It usually appears as vertical bars below the chart:
Green bar = Higher trading volume in buy orders.
Red bar = Higher trading volume in sell orders.
3️⃣ Why is Trading Volume Important?
Confirming the trend: If the price rises along with high trading volume, this often means that the trend is strong and real.
Detecting false movements: If the price moves a lot but with low trading volume, the rise or fall may just be a misleading movement.
Identifying reversal points: Sometimes a significant increase in trading volume at strong support or resistance means that the price may change direction.
Trading volume is a simple but powerful tool for understanding market strength and the validity of price movements.
Do not look at the price alone… trading volume is the voice that tells you what is happening behind the scenes.
In short, this is a series aimed at simplifying and explaining some trading and technical analysis concepts for beginners.
Follow me for more
