What is Turnover Volume?

Trading volume is information containing data on the number of transactions that were sold or bought in a certain period of time. It is usually captured in the nature of a day, which makes investing in the stock market much easier and more efficient.

Sometimes volume is juxtaposed together with turnover – but it is worth remembering that these are two different terms. This is because turnover means the value of all executed transactions, i.e. the product of executed transactions and price.

Volume, and the chart

Under the chart are usually placed bars in the form of histogram. They allow you to observe the decline in prices and determine whether it is temporary or long-lasting and can be called a trend, and estimate whether we are accidentally dealing with a rebound or with a correction. It happens that the price is not equivalent to the value of the volume, which gives the opposite picture of the current trends than the one that results from the analysis of the prices themselves. As a result, it can be concluded that in Forex this information is not available to everyone, and the trader only has knowledge of volume at his broker.

What is Volume used for?

Volume allows us to determine the trend or confirm the relevance of price formations. If the volume is high, we can assume that it is associated with an upward trend. Volume allows us to determine the actual interest in a given asset, and not just the level of apparent price fluctuations.

Volume, and the forex market

In the case of the forex market, it is important to remember that it is a regulated market solely on a face-to-face basis between sellers and buyers. Real volume, on the other hand, appears on regulated exchanges such as the Stock Exchange or the Chicago Mercantile Exchange.

When it comes to Forex it is very important to take into account the amount of volume. Why? Among other things, it allows you to study the activity of market users.

What is ticker volume?

The tick volume is used to analyze the frequency of transactions, which does not at the same time inform about the actual turnover on the exchange. This information is provided by the broker and has nothing to do with this kind of information on a typical stock exchange.

How to use the volume?

Volume – like many other data – should be analyzed based on recent sessions. Based on them, it is possible to estimate whether a change is about to take place. It is worth remembering that volume represents only one type of data, and an accurate analysis requires the use of other factors and values as well.

One of the most important pieces of information in the context of volume analysis is its unexpected amount. This is a signal that there are significant players in the stock market – and this information can already be used meaningfully.

What does volume look like in Forex?

In the forex market, volume is very difficult to access due to the fact that most of the trading takes place in the internal systems of foreign exchange brokers. Thus, if your broker makes volume available to you, it is only the volume coming from the clients of the broker in question, and not from the entire market.