Volume
Candlefocus EditorVolume can also be used to confirm a price trend. If a security is trending in a certain direction and it experiences higher than average volume, it is a confirmation that the trend is supported by the market. On the other hand, if the price trend is higher but the volume is low, the validity of the trend may be questioned.
Volume is important as it helps to demonstrate the strength of a move in the market. Generally, if a security has increasing volume, it is indicative of increasing interest and therefore it may be a good time to buy. Conversely, if a security has decreasing volume, it is indicative of decreasing interest and therefore it might be a good time to sell.
Most volume data is provided in terms of the amount of the security that has been exchanged over the past hour, day, week, or month. Some brokers will also provide data on a moving average of volume. This data is important to traders and investors because if you identify a security that has been consistently high in volume over a given period of time, then it may be a security that is worth trading.
Volume can also be used to detect potential support and resistance levels. If volume decreases or increases at a certain price level, it may be an indication that the price level is a support or resistance level.
In conclusion, the volume of a security is an important metric to consider when evaluating stock investments. It helps to give investors an indication of how actively a security is being traded, and it can also be used to detect support and resistance levels. Additionally, it helps to confirm price trends and determine whether or not a given trend is supported by the market.