Definition. The number of contracts that changed hands in a given period. The basic measure of market activity.
How it works
Every trade has a buyer and a seller, so volume is counted once per trade. The distribution of volume over time and across price levels is the basis of the volume profile, the footprint and VWAP.
Example
A breakout from a range on rising volume shows greater participant commitment than a move on low volume.
What to watch out for
Volume tells you about activity, not direction. The same volume can mean initiative or absorption.
You'll find the full explanation with graphics, examples and exercises in the 🖥️ Order flow atlas space, and its use in the live market in the 🔴 Live Room. Both are available to Club members (in Polish).
