Stock market volume analysis for retail investors

Stock market volume analysis for retail investors

Stock market volume analysis for beginners



Volume in the stock market is a very important parameter. The stock market two things are present one is called price and the other is called volume. Price and volume both are equally important in the
stock market.

Stock market volume analysis for beginners


  1. In the stock market, the stock price level shows the levels at which stock is bought and sold. Buying and selling at each time frame creates price level and volume 
  2. The volume moves the stock price. If there is a high buying or more demand volume stock price will rise and if there is a high selling volume or more supply stock price will fall.
  3. Check the chart in which you can see how stock price increases as volume expands and stock price decline and contracts
  4. If the volume in stock increases as the price is increasing and stock volume is decreasing as the stock price is decreasing then the bullish trend in stock continues in stocks
  5. The reason behind this is when the stock price goes up sellers are willing to meet more buyers meaning when sellers try to sell the stocks more buyers are present in the market and stock volume increases.
  6. When the stock price goes down sellers are not willing to sell their holdings because they believe that stock price will move higher later on this creates low volume in stock when it declines. This activity shows a bullish trend in the stock.
  7. But when stock volume increases - stock price decreases and if volume decreases when stock price increase the bullish trend turned into the bearish trend.
  8. The reason behind the bearish trend is buyers believe that stock price will be available at a lower price, therefore, buyers are absent from the stock they believe it is not the good level for buying this creates bearish undertone.
  9. It is important to note that to remain the stock in uptrend stock should have higher volume when it moves higher and stock volume should be lower when it consolidates
  10. If the stock trade in downtrend stock should have a higher volume when the stock price falls and stock volume should decrease when the stock price moves up and when stock price trade-in consolidation phase.


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