Volume
Volume is the number of trades in a stock or index over a period of time. This time frame may be minutes, days, weeks or even months. On the chart, volume is usually represented by the histogram below the price chart. Do not confuse the colors of the volume histogram with positive and negative numbers. Red simply signifies a day that price closed higher than it opened. Green signifies a day price closed higher than it opened.
Markets count volume in different ways. For every buyer there is a seller. On the NYSE if a buyer bought 100 shares from a seller, that is counted as one trade and 100 shares. Only one side of the trade is counted. On the NASDAQ, both sides of the trade are counted, the buyer and the seller. The NASDAQ would count the same trade as 2 trades and 200 shares.
TradeWithPros looks at stock volume for unusual activity. Large increases or decreases in volume may signal a change in sentiment toward a stock. It is important for traders to understand that volume is just another tool. Stocks and indexes alike can increase in price or decrease in price with any volume level.
