Trading volume is really important when trying to predict how prices will move in the future. Here’s a simple breakdown of how it works:
Trends Confirmation: When lots of people buy a stock and the price goes up, it shows strong interest in that stock. This means the price might keep going up. On the other hand, if the price goes up but not many people are buying, it might not last long.
Price Reversals: If the price of a stock is going down and more people start selling, that could mean the price is going to change direction soon.
For example, if a stock's price goes from 55 and 1 million shares are sold, that move is more important than if only 100,000 shares were sold for the same price change.
So, looking at trading volume along with price changes can help you make better trading decisions!
Trading volume is really important when trying to predict how prices will move in the future. Here’s a simple breakdown of how it works:
Trends Confirmation: When lots of people buy a stock and the price goes up, it shows strong interest in that stock. This means the price might keep going up. On the other hand, if the price goes up but not many people are buying, it might not last long.
Price Reversals: If the price of a stock is going down and more people start selling, that could mean the price is going to change direction soon.
For example, if a stock's price goes from 55 and 1 million shares are sold, that move is more important than if only 100,000 shares were sold for the same price change.
So, looking at trading volume along with price changes can help you make better trading decisions!