The trading volume indicator is a technical indicator that reflects investors’ trading activity within a specific period of time.
Use of Volume Indicator
Indicators are generally used in conjunction with asset price movement analysis to confirm the strength of a trend and signal its weakness, such as identifying possible price reversals.
Trend confirmation:
1- An upward trend is evidenced by an increase in trading volume under conditions of higher prices;
2-The downward trend is evidenced by rising trading volumes amid lower prices.
Signs of a weak trend:
1- A drop in trading activity could be a sign of investor doubts about future trends. Asset demand and higher prices will disappear in the event of higher prices and a simultaneous decline in performance volumes.
Calculate
Volume = Transaction volume during a fixed period.