Volume
Volume is the amount of an asset bought and sold in a period (a candle, a day). It shows how actively people are trading at that price.
How it works
On a chart volume is usually shown as bars under the candles: each bar is how many coins or contracts changed hands during that candle. Each trade is counted once, since every buy has a sell. A tall bar means many participants were active in that move.
Volume confirms or questions a price move. A breakout on above-average volume deserves more trust than one in a quiet market. Rising price on falling volume can mean fewer buyers are stepping in.
Forex has no single exchange, so terminals often show tick volume (the number of price changes) rather than real volume. In crypto volume is reported per exchange, and on small venues it can be faked (wash trading).
The average volume over the last 20 candles is 1,000 BTC. Price breaks resistance on a candle with 3,000 BTC of volume and closes above the level. That is a more convincing breakout than the same one on 600 BTC.
Price makes a new high, but the volume on it is half that of the previous high. It is not a short signal, but it is a reason to tighten your stop and not open a new buy.
The mistake is treating high volume as an "up" signal. Big volume also comes with selling, panic dumps and stop runs. Read volume together with price and the level: where it spiked and how the candle closed. And do not trust the volume of one obscure exchange: compare it with the major venues.
Questions and answers
What is trading volume in simple terms?
It is how much of an asset changed hands in a given time. High volume means active trading; low volume means a quiet market.
How do I read volume on a chart?
Compare the volume bar with the average of recent candles. A move or breakout on above-average volume is usually more reliable than one on low volume.
What does high volume on a price drop mean?
It means many participants are actively selling and the selling pressure is strong. But at the end of a sharp fall, high volume can also mark capitulation, after which price turns.
Related terms
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Updated: 2026-10-19