Volume
Volume is the number of shares, contracts or coins traded in a period. It shows how much activity sat behind a price move.
How Volume is calculated
Add up every executed trade's size in the bar. A volume spike is often defined relative to a moving average of volume, for example a bar with more than twice the 20-bar average. Crypto volume is reported per exchange and the totals do not match across venues.
How it is read
A breakout on high volume is usually read as more convincing than one on thin volume. Falling volume in a trend is read as fading interest.
Common mistakes
- Comparing raw volume across stocks. Compare each to its own average.
- Ignoring time of day. Volume is heavy at the open and close and light at midday.
- Treating one exchange's crypto volume as the whole market.
Test it yourself
Volume is available as a price field, so you can compare it with a moving average of volume. The Lab charges trading costs on every trade, fills on the next day's open, and shows how many attempts you have made.
What Tickfloor tested
Tickfloor's research desk has backtested 678 strategies, net of modelled trading costs. After correcting for the 761 tests run, 0 passed. That does not prove no strategy works. These are historical diagnostics, not validation under Testing Standard v2: the backtest harness predates that standard and has not been re-run to meet it.
Lessons that cover it
- Reading a price screen
- The shape of a trading day, plus rebalance and expiry days
- The day’s average price (VWAP)
- Volume, and what makes a breakout believable
Related concepts
General information only. It doesn't consider your objectives, finances or needs. Tickfloor holds no financial services licence and never places trades.