Volume – Trading Volume
Volume represents the total number of shares traded for a given timeframe. Volume is a measure of liquidity in a stock or index. The higher the volume, the more liquidity is present and the more competitive the market will be. Higher volume typically results in narrower spreads, less slippage, and less volatility.
Dollar Volume is the measure of liquidity in terms of dollars. Dollar volume is derived from multiplying the total number of shares traded by the average price per share. High dollar volume can often offset some light measures of total share volume, as may be the case in a high-priced stock.
Return to the main chart patterns page to learn more trading terms.