See: Trading Volume.
You know those bands that a very small number of people really, really like, and everyone else kinda thinks of them as okay, but not worth building an entire Facebook fan page? You know...the Cures, and Smiths, and Radioheads of the world?
Sometimes, stock market moves can be like that. There's a big move (lots of passion), but not much broad support (it happens without a lot of volume).
Volume measures the amount of shares that trade hands during a given period of time. All things being equal, a price move with more volume has more chance of auguring a real long-term trend. So if shares rise 2% on low volume, people will be like, "Yeah, great, let's see what happens tomorrow." If they rise 2% on record-breaking volume, people are more likely to say to themselves, "Where can I get more margin to buy into this sucker?"
The trade volume index helps put those judgments in quantitative form. It's a technical indicator that takes both price and volume into effect. It lets traders see at a glance whether moves have some oomph behind them, or if they have a high probablity of reversing in the near future.
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Finance: What is Trading Volume?29 Views
finance a la shmoop what is training volume training volume with a lot of
volume and this is trading with okay yeah yeah you get the idea [Man shouting into megaphone]
volume here is not about number 11 on the dial but rather about the number of [Person turning up volume dial]
shares trading back and forth on a given day week hour a month and generally
speaking higher levels of volume are a relatively bullish sign for the market [Water pouring]
on all else being equal that is optimistic investors are putting money
into the system buying up stocks and contributing liquidity like they are [Investor money transfer to stock market]
seeking risk they're hopeful they're optimistic lots of volume high liquidity
low volume low liquidity and high is good
Inessa not just a california proposition 64 thing high volumes are attractive to [People protesting for cannabis]
large institutional professional traders and investors because there remains the
perception that if they want to sell a given position well then with high
volumes they can get out quickly so they feel less hesitation about getting in
quickly okay good just checking [Man shouting into megaphone]