Volume

Volume shows you how many shares of an equity traded during a given time period. Many investors say volume is where the large institutional traders leave their footprint on the market. Volume is included in the default setting for your Yahoo! Finance charts and can help you confirm how strong price movement is. If a lot of investors are buying or selling—which will be reflected in the volume numbers—you know it is a strong price movement. If a limited number of investors are buying or selling, you know it is a weak price movement.

You can see when volume is increasing or decreasing simply by looking at the height of the volume bars. The taller the bar, the more volume traded during that time period.

Volume + MA helps you identify trends in volume. When you see the volume moving average heading higher, you know more and more investors are becoming interested in the equity—which is a bullish sign. When you see the volume moving average heading lower, you know fewer and fewer investors are staying interested in the equity—which is a bearish sign.

While you can’t make buying and selling decisions based on volume alone, it does help confirm other trading signals you are seeing on your chart.

Now that you're finished reading the text version of this tutorial, watch the video.

Next tutorial: Williams %R

Back to the Yahoo! Finance Charts User Guide Index