Day Trading Based on Buying Volume and Selling Volume

Volume analysis is the method of reviewing the strength of a trend, based on volume activity. In the market Volume is one of the oldest day trading indicators used by market technicians. Apart from technicians, market fundamentalists also consider the volume or the number of shares traded for a given security.

The higher the volume the easier it is to buy and sell large quantities of stock, because other traders are there to fulfill the other side of the trade.

For each transaction, there must be a buyer and seller. To buy a seller must sell to you, and to sell a buyer must buy from you.

This leads to some confusion because you'll often hear phrases like:

The sellers are in control.

Buying volume is outstripping selling volume.

It's a heavy buy volume day.

Buyers are in control when the price is getting pushed higher. The volume that occurs at the offer price is known as Buying volume. It is the lowest advertised price sellers are willing to sell it. If someone buys at that price it shows the stock is desired and is called buying volume.

Thus, it can be concluded that the volume indicator is one of the simplest methods for observing the buying and selling activities of a stock at important levels. However, the trickiest part is that a volume can provide conflicting messages for the same setup. Still, the deciding factor to turn a profit in the market can be calculated based on your ability to judge what the volume is telling you in combination with price action.

The volume is a very powerful tool, but many traders and technical analysts do not use it, as this is a simple indicator. Still, many traders believe the strength of using the volume indicator and use it to get maximum profit. In fact, the volume is the most popular indicator used by the technicians. Volume is a tremendously valuable tool and is used in different ways. The few common volume-based indicators are On Balance Volume, Chaikin Money flow, and Klinger Volume Oscillators. The team of Money Classic Research uses these technical tools to generate accurate stock market tips.