Volume

Volume measures the quantity of an asset traded during a given time. In forex, it represents the number of lots or contracts exchanged between buyers and sellers. High volume indicates strong market activity and participation, while low volume suggests reduced interest. It is often visualized as a histogram below price charts, showing transaction counts for each period. This metric helps identify the strength behind price movements.

Retail traders often use volume indicators to confirm the validity of price trends and breakouts. A price move accompanied by high volume is generally considered more significant and sustainable than one on low volume. Conversely, a breakout on low volume might be a "fakeout." Understanding volume can help assess market conviction, reducing the risk of entering trades based on weak price signals. It aids in distinguishing genuine market shifts from temporary fluctuations.