Trading Volume: Analysis and Interpretation

Daily trading volume shouldn’t be confused with dollar volume, which is a stock’s share price times its daily volume. Calculating volume is simply the total amount of shares traded for the day, which includes both buy and sell orders. You can determine the daily trading volume on your own—all transactions are publicly available—by calculating the total amount of shares traded. In the United Kingdom, the sales-weighted average electric premium shrank between 2018 and 2022, thanks to a drop in prices for electric SUVs, as in the United States. Nonetheless, electric SUVs still stood at a 45% premium over ICE equivalents in 2022, which is similar to the premium for small models but far higher than for medium cars (20%).

Overall, rising volume accompanying a price rise suggests the uptrend is strong and may continue. But if volume starts fading even as the price keeps climbing, it often means the trend is running out of gas and a reversal may be looming. Volume fading during a price drop can signal the selloff may be exhausting itself, pointing to an opportunity to buy at a relative low before an uptick.

• Every transaction that takes place between a buyer and seller of a security contributes to the total volume count of that security.
• Calculating crypto trading volume requires determining the total value of a type of cryptocurrency that has changed hands in a given period.
• The Invesco QQQ Trust (QQQ), the second most-traded ETF based on average daily volume traded within the U.S., has long been considered one of the most liquid ETFs on the market.
• Yields on US Treasuries tumbled after the Federal Reserve announced its decision to leave interest rates unchanged.

The changes in volume from day to day indicate that a stock is more in demand if the volume bar rises and the stock price increases or less in demand if volume drops on price decreases. For example, suppose company ABC extended its uptrend for another five months and increased by 70% in six months. The investor sees that share prices of company ABC are still in an uptrend and continues to hold on to the shares.

This is usually caused by many investors buying a stock simultaneously, which drives the price up quickly and dramatically. Volume can also be used to confirm price movements, as a large increase in volume usually indicates that a major move has happened or could soon happen. This article will give you the critical knowledge to help you interpret stock price action. Once price broke through $10.00, new participants failed to enter the market as represented by the declining/flat volume. We use our knowledge of participant activity to confirm trends, breakouts, and reversals.

The MFI indicator is used in reversal trading to identify support and resistance levels. If the indicator hits the upper boundaries, we can expect a correction. Volume spikes due to price action in a cryptocurrency, but the root cause leading to the spike in volume varies by project and news cycle.

Tesla, Ford, Stellantis, BMW, GM, Volkswagen (VW) and Audi have all either started manufacturing or announced plans to manufacture EVs in Mexico. Chinese carmakers such as BYD, Chery and SAIC are also considering expanding to Mexico. Elsewhere in the region, Colombia and Costa Rica are seeing increasing electric car sales, with around and in 2023, respectively, but sales remain limited in other Central and South American countries. Volume is the amount of an asset or security that changes hands over some period of time, often over the course of a trading day. For instance, a stock’s trading volume refers to the number of shares traded between its daily open and close. Trading volume, and changes in volume over the course of time, are important inputs for technical traders.

Some province-led support and investment also remains in place and plays an important role in China’s EV landscape. As the market matures, the industry is entering a phase marked by increased price competition and consolidation. In addition, China exported over 4 million cars in 2023, making it the largest auto exporter in the world, among which 1.2 million were EVs. This is markedly more than the previous year – car exports were almost 65% higher than in 2022, and electric car exports were 80% higher. The main export markets for these vehicles were Europe and countries in the Asia Pacific region, such as Thailand and Australia. Trading volume is the total number of shares of a security that were traded during a given period of time.

An uptrend paired with increasing and/or above average volume implies investor enthusiasm for that stock or asset is strong, which could lead to more buying and even higher prices. In short, above average and/or increasing trading volume can signal that traders are truly committed to a price move, which you can see in Chart 1 below, where the price and volume lines are both increasing. Contrariwise, below average and/or decreasing volume can signal a lack of enthusiasm, which you can see in Chart 2, where volume is declining even as the price continues to creep higher.

Volume in the stock market is the amount of stocks traded per period. Investors may also follow a security’s tick volume, or the number of changes in a contract’s price, as a surrogate for trade volume since prices tend to change http://ndgames.ru/epolets-ekranizirovali-ykrainoiazychnyu-pesnu-odin more frequently with a higher trade volume. While many people abstain from ejaculating for several days while trying to conceive, or going through fertility treatments, the effectiveness of this practice is not clear.

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If confirmed, this figure will come close to the total global electric car sales in 2022. As a result, electric car sales could represent around 45% of total car sales in China over 2024. Traders and investors use the metric to gauge the interest in a security to help them make trading decisions.

Ideally, I want to see volume drop off during the consolidation before the breakout. That said, if the price had dropped a whole bunch on really big volume, if the price starts moving up on “good” upside volume, that upside volume will be obscured because downside volume was so big. If there was a big volume on a decline, when the price starts rising it probably won’t be on even bigger volume, but we want to see volume that is strong on the up days. This is discussed a bit more when I talk about volume climaxes in the ETF section.

SUVs may be defined differently across regions, but broadly refer to vehicles that incorporate features commonly found in off-road vehicles (e.g. four-wheel drive, higher ground clearance, larger cargo area). Crossovers are counted as SUVs if they feature an SUV body type; otherwise they are categorised as medium-sized vehicles. Concerns about range compared to ICE vehicles, and about the availability of charging infrastructure for long-distance journeys, also contribute to increasing appetite for larger models with longer range. In the crypto industry, a project that receives good news such as a new partnership or an exchange listing will often experience a volume spike. If a new crypto launches and is listed on an exchange such as Phemex, it receives exposure from a new audience and that leads to a spike in trade activity & volume.

Low volume (comparatively) will often precede a large price move on larger volume. For a full method on how to day trading stocks, including what stocks to trade, strategies, risk management, and more, see the Price Action Stock Day Trading Course. Very popular ETFs are unlikely to have major lulls in volume prior to a breakout, and may not even have increasing volume http://imp-world-r.narod.ru/images/articles/index.html on a breakout. Yet the stocks themselves, held within the ETF, will likely have volume increases on the breakouts (if they are likely to be legitimate breakouts). Another time we see declining volume is often before a big price move. Consider searching for stocks that have low average volume over the past several days, compared to a 30-day average, for example.