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Username: Peter

Rating:
Guru Stars

Asked to: Heng Kim

Date Created: 22 Jul 2015
Category 17
Tag Forex
Question Would you explain what a trading volume is?
Advice from Guru
Hi Peter,

Trading volume, or volume, is the number of shares or contracts traded during a given period.

Volume is an important indicator in technical analysis as it is used to measure the worth of a market move. If the markets have made strong price move either up or down the perceived strength of that move depends on the volume for that period. The higher the volume during that price move the more significant the move.

Volume tells investors about the market's liquidity. Higher volume means higher liquidity and better order execution. When investors feel hesitant about the direction of the stock market, futures trading volume tends to increase. Volume also tends to be higher near the market's opening and closing times, and on Mondays and Fridays. It tends to be lower at lunchtime and before a holiday.

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