Volume recap

I’ve mentioned volume in previous chapters so first I’ll briefly summarise some important points:

⇒ Volume is the number of transactions in each trading period, so on a daily chart it’s the number of trades each day and on a weekly chart the number of trades each week.

⇒ Every trade involves both a buy and a sell transaction, so volume is the number of shares purchased or the number of shares sold as these numbers must be exactly equal.

⇒ Demand is the number of shares ordered (bids) and supply is the number of shares offered (offers). The market price depends on the number of shares bid and the number of shares offered, and when demand exceeds supply the price will rise, whereas when supply exceeds demand the price will fall.