Volume in Stock Trading: 5 Volume Indicators You Need to Know

Volume in stock trading is an important indicator that can be used to gauge market strength and determine future price movements. It measures the number of shares traded in a given period of time.

There are many different volume indicators that traders can use, but five of the most popular are:

• Positive Volume Index (PVI)

• Negative Volume Index (NVI)

• Volume RSI

• Volume Price Trend Indicator (VPT)

• On-Balance Volume (OBV)

Traders can use volume to confirm trends, identify reversals, and find entry and exit points.

For example, if a stock is in an uptrend and volume is increasing, then it is a sign that the uptrend is strong and likely to continue. If a stock is in an uptrend and volume is decreasing, then it is a sign that the uptrend is weakening and may reverse.

Traders can also use volume to identify reversals. For example, if a stock is in an uptrend and volume suddenly decreases, it could be a sign that a reversal is coming. Similarly, if a stock is in a downtrend and volume suddenly increases, it could be a sign that a reversal is coming.

Traders can also use volume to find entry and exit points. For example, a trader might buy a stock when the volume is increasing and sell it when the volume is decreasing.

It is important to note that volume is just one indicator and should be used in conjunction with other technical indicators and fundamental analysis.

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