What is volume down?

When the price of a particular stock falls on a particular date, there is a drop in trading volume in the stock market. The number of shares is the total number of shares traded in a day, regardless of whether the shares are bought or sold. It is important to note that even if the stock price has fallen by only a small amount, the decline in the stock may be particularly large. The combined use of quantitative data and price changes is a technical analysis method through which investors can discover market trends.

What investors must understand is that even if the actual trading volume of stocks increases from the previous day, there will be a decrease in trading volume. All that is needed to classify stocks is price drops, and actual trading volume has nothing to do with the terminology here. In contrast, stocks that have increased in number are those whose closing price has risen from the previous day’s trading.

For example, suppose there is a stock whose price drops from $50 per share to $40 per share in a trading day. On that day, a total of 600 shares were sold and another 400 shares were bought. The total trading volume of the stock is 1,000 shares, which is 600 shares plus 400 shares. If the price rises to $45 the next day, thanks to the purchase of 200 shares and the sale of 100 shares, even if the total equity is regarded as a large volume, the transaction volume has actually decreased from the previous day.

Trading volume ultimately measures the liquidity of a particular stock, which is the ability of investors to find both buyers and sellers of stocks. When matching the quantity to the price level, it can show the overall reliability of the inventory trend. For example, a low-volume decline may mean that the price decline is only temporary, while a high-volume decline may indicate that inventory will continue to plummet in the near future.