Definition of 'Volume'
The number of shares or contracts traded in a security or an entire market during a given period of time. It is simply the amount of shares that trade hands from sellers to buyers as a measure of activity. If a buyer of a stock purchases 100 shares from a seller, then the volume for that period increases by 100 shares based on that transaction.
Volume is an important indicator in technical analysis as it is used to measure the worth of a market move. If the markets have made strong price move either up or down the perceived strength of that move depends on the volume for that period. The higher the volume during that price move the more significant the move.
As illustrated on the chart, 2/7 and 3/7 have high trading volume as the past 5 days. And with that it explains the bull rush of this particular stock, rising from S$0.087 to a high of S$0.120.
Yet the volume for the next day (4/07) has drop significantly. This is clearly a signal for traders to exit.
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Volume
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