# Volume > Volume is the number of shares or contracts traded in a period. Learn how to read volume bars, what high and low volume mean and how volume confirms price moves. Source: https://learn.tradelabsai.com/markets/volume/ Track: Markets and Instruments · Level: Beginner · Updated: 2026-10-03 Publisher: TradeLabs AI (https://tradelabsai.com). Education, not financial advice. Cite as: TradeLabs Learn, "Volume", https://learn.tradelabsai.com/markets/volume/ Volume is the number of shares, contracts or coins traded during a period, such as a minute, an hour or a day. Every trade has a buyer and a seller, so one share traded counts as one unit of volume, not two. On most charts, volume appears as bars under the price, one per candle. Volume shows how much participation stands behind a price move, which helps you judge whether that move is meaningful. ## Reading volume on a chart - **Tall volume bars** mean many shares changed hands in that period. - **Short volume bars** mean little activity. - Volume bars are often coloured green or red to match the candle above, but the colour shows the price direction, not whether buyers or sellers "won". Every trade still has both. **Example: Two breakouts** Stock A breaks above a resistance level at $50 on volume three times its 20 day average. Stock B breaks the same kind of level on volume half its average. Stock A's breakout shows broad participation and is more likely to hold. Stock B's move happened with few traders involved and is more likely to fail. Neither is certain, but volume changes the odds. ## What volume tells you | Price action | Volume | Common reading | |---|---|---| | Rising | Rising | Healthy uptrend with growing participation | | Rising | Falling | Rally losing strength; watch for exhaustion | | Falling | Rising | Strong selling pressure | | Falling | Falling | Selling drying up; a decline may be maturing | | Sideways | Very low | Consolidation; often comes before a larger move | | Big move | Extreme spike | News, capitulation or a climax | These are tendencies, not rules. Context and the broader trend matter. ## Relative volume Raw volume numbers mean little on their own: 2 million shares is huge for a small company and tiny for a mega cap. Traders compare current volume with its own average, such as the last 20 days at the same time of day. A reading of 2.0 means twice the usual activity. See [Relative Volume](https://learn.tradelabsai.com/volume/relative-volume/). ## Volume through the day Stock volume follows a familiar pattern: heavy at the open, lighter in the middle of the day and heavy again into the close, when many funds trade. Comparing a morning's volume with a full day's average is misleading; compare with the same time of day. Forex volume peaks when London and New York overlap, and crypto volume rises when US and European traders are active. See [Trading Sessions](https://learn.tradelabsai.com/markets/trading-sessions/). ## Volume in different markets - **Stocks and ETFs:** exchanges report consolidated volume across venues. - **Futures:** volume counts contracts traded; also watch [Open Interest](https://learn.tradelabsai.com/markets/open-interest/), the number of contracts still open. - **Forex:** there is no central exchange, so "volume" on most forex charts is tick volume, the number of price changes, used as a proxy for activity. - **Crypto:** volume is reported per exchange, and some smaller exchanges have historically inflated their numbers. Focus on reputable venues. ## Volume based tools Several indicators combine price and volume: - [VWAP](https://learn.tradelabsai.com/volume/vwap/), the volume weighted average price, used as a benchmark for intraday trading. - [On-Balance Volume (OBV)](https://learn.tradelabsai.com/volume/obv/) and the [[accumulation-distribution|accumulation and distribution line]], which track volume flowing in and out. - [Volume Profile](https://learn.tradelabsai.com/volume/volume-profile/), which shows how much traded at each price level rather than each time period. ## Volume and liquidity Volume is related to [Liquidity](https://learn.tradelabsai.com/markets/liquidity/) but not the same. High volume usually goes with tight spreads and deep order books, but a stock can trade heavily during a panic while liquidity at any one price is thin. Use both volume and the spread when judging how easy a market is to trade. ## Frequently asked questions ### What is good trading volume for a stock? It depends on your position size. Many traders prefer stocks trading at least several hundred thousand to a few million shares a day, so their orders are a tiny fraction of daily volume. ### Does high volume mean the price will go up? No. High volume means high activity. It can accompany strong rises or strong falls. Read it together with price action. ### What does low volume mean? Low participation. Moves on low volume are often less reliable and spreads may be wider. ## Sources - Wikipedia, [Volume (finance)](https://en.wikipedia.org/wiki/Volume_%28finance%29) ## Continue learning - Next lesson: [Open Interest](https://learn.tradelabsai.com/markets/open-interest/) - Previous lesson: [Volatility](https://learn.tradelabsai.com/markets/volatility/) - Related: [Volatility](https://learn.tradelabsai.com/markets/volatility/): Volatility measures how much and how fast prices move. Learn historical and implied volatility, ATR, the VIX, why volatility clusters and how it affects risk. - Related: [Volume Analysis Basics](https://learn.tradelabsai.com/volume/volume-analysis-basics/): Volume analysis uses trading activity to confirm or question price moves. Learn the core principles, volume spikes, climaxes, dry ups and how to apply them. - Related: [Relative Volume](https://learn.tradelabsai.com/volume/relative-volume/): Relative volume compares current volume with its normal level. Learn the RVOL formula, time of day adjustments, scanning for stocks in play and how to use it. - Related: [Liquidity](https://learn.tradelabsai.com/markets/liquidity/): Liquidity is how easily you can trade without moving the price. Learn the signs of a liquid market, how illiquidity costs you and when liquidity disappears. - Related: [Open Interest](https://learn.tradelabsai.com/markets/open-interest/): Open interest is the number of futures or options contracts still open. Learn how it differs from volume, how it changes and how traders read it with price. - Related: [VWAP](https://learn.tradelabsai.com/volume/vwap/): VWAP is the average price weighted by volume since the session started. Learn the formula, why institutions use it, VWAP bands and intraday trading strategies. - Related: [Volume Profile](https://learn.tradelabsai.com/volume/volume-profile/): Volume profile shows how much traded at each price instead of each time period. Learn to read profiles, POC, value areas, nodes and how traders use them.