Volume analysis is the technique of assessing the health of a trend based on volume activity. In fact, volume is one of the oldest day trading indicators in the market. The volume indicator is the most popular indicator used by market technicians as well. Trading platforms may lack certain other indicators; however, you would be hard-pressed to find a platform that does not include volume.
Why is Volume Analysis Important?
In addition to technicians, fundamental investors also analyze volume — taking notice of the number of shares traded for a given security. This gives them a sense of the supply and demand present.
Regardless of your style of trading or investing, volume analysis is one of the simplest methods for observing buying and selling activity of a stock at key levels.
However, not all volume readings are straightforward. Many times volume can provide conflicting messages. To that end, your ability to assess what volume is telling you in conjunction with price action can be a key factor in your ability to turn a profit in the market.
In this article, we will cover how to assess the volume indicator to help us determine the market’s intentions across four common day trading setups:
- Breakouts
- Trending Stocks
- Volume Spikes
- False Breakouts
In addition, we will discuss advanced volume analysis techniques and apply these methods to assess the strength of the equities and bitcoin markets. But before we do, take a few minutes to prime yourself for the content below by watching this video on volume analysis: 
What is Volume?
Very simply, volume represents all the recorded trades for a security during a specified period. This specified period can range from monthly charts to 1-minute charts and everything in between.
Most trading platforms, Tradingsim included, print each volume bar as either green or red. Green bars are printed if the stock closes up in price for a period and red bars indicate a stock closed lower for a given period.
This color-coding need not mean there was more “down or up” volume for the period; it just represents how the stock closed.
One benefit of volume analysis is that it cuts through much of the noise in the Level 2 montage. It does so by giving you a visual representation of where traders are actually placing their money.
IN COMING DAYS WE WILL DISCUSS STRATEGIES UPON VOLUME ANALYSIS HOW IT’LL HELP YOU TO PRETEND MARKET BEHAVIOR IN ADVANCE.
BEFORE THE NEXT POST DO COMMENTS IF YOU ALREADY KNOW ABOUT VOLUME ?? OR ALSO DO COMMENTS IF YOUR BEGINNER AND WANNA KNOW MORE ABOUT VOLUME STRATEGIES.
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