Definition
Trading volume represents the total quantity of shares or contracts exchanged between buyers and sellers during a given period, typically a day. Volume is a key indicator of market interest and liquidity. High volume often accompanies significant price moves and can confirm trend strength. Low volume during price changes may indicate weak conviction. Volume analysis is a fundamental component of technical analysis, with patterns like volume climaxes and volume divergences providing trading signals.
Formula
Example
A stock averages 5 million shares daily. On an earnings announcement, it trades 25 million shares (5x average volume), suggesting significant investor interest and validating the price move.
FAQ
What is Trading Volume?
The total number of shares or contracts traded during a specific period.
How do you calculate Trading Volume?
A common formula for Trading Volume is: 平均日成交量 = 日成交量之和 / 天数; 成交量比率 = 当前成交量 / 平均成交量
Why is Trading Volume important?
Trading Volume helps investors evaluate market structure and make more informed decisions.