Volume

Volume is a count of how many shares (or contracts, for futures and options) actually changed hands over a given period of time. If 500,000 shares of a stock were bought and sold between market open and 10 a.m., that stock's volume for that hour is 500,000.

Every trade involves a buyer and a seller, and each completed trade adds to the volume count. Volume is usually shown as a bar chart below the price chart, with each bar representing the total shares traded during that candle's time period — a minute, an hour, a day, whatever the chart's timeframe is set to. Taller bars mean more shares traded, shorter bars mean fewer.

The nuance beginners miss is that volume measures activity, not direction. A huge volume spike can happen on a day the price barely moves, and a small volume day can accompany a sharp move. What traders actually care about is volume relative to what's normal for that stock — a stock that usually trades 2 million shares a day suddenly trading 20 million is a signal worth noticing, even if you can't yet say whether it's bullish or bearish. Volume is also cumulative through the day but resets at the start of each new session, and it's worth remembering that a "share traded" is one transaction between one buyer and one seller, not two separate events.

People sometimes confuse volume with "volatility" (how much price is swinging) or with "liquidity" (how easy it is to get in and out without moving the price). They're related — high volume often brings high liquidity — but they're not the same measurement.