Importance of Volume in Trading: Explained for Beginners

[00:06] in this episode we're going to talk about volume. Like we But when you are using candlesticks, we also have to use volume to identify things properly. So brother, there

[00:20] seems to be some volume in the chart here. [MUSIC] So what does volume mean? Green volume means there are more buyers. Good and red volume means sellers. If that's what you guys think, you're absolutely wrong about music like this. Well, in today's video we are going to

[00:33] talk about what exactly is volume and how is volume measured ? How is volume used in trading ? So if you guys are my name is Dinesh Kola and you know me Stock Burner and you guys are watching a

[00:47] am teaching my younger brother Arjun trading from zero. So if you guys want to learn trading free of cost then this series is made for you guys because I will hardly teach anyone at the same level at which I am teaching my younger brother,

[01:00] so take full advantage of this series and yes, he has to purchase his dream car as soon as he turns 17 or 18. Which brother? For 91 91, he wants the brother to do the trading correctly. Now whether it will be possible or not is possible only when he learns things in the right

[01:14] way. But you guys should enjoy this series completely and learn trading and work in the market only after learning it. Now let us talk about today's topic which is Volume and before Volume, let us talk about what topics we have covered.

[01:27] And the last topic we covered was on candlesticks. Now we are on to the next topic which is our episode number 13 of Vol. Volume concerns as brother had said

[01:39] Vol. Volume concerns as brother had said that if it is green then there are more buyers and if it is red then there are more sellers. I will clear this up now. Ok? So do you know what volume means ? The number of shares and contracts traded at a specific

[01:52] time. If you look at the volume, for example, here we have the volume. The time here we have the volume. The time frame is 15 minutes. The frame is 15 minutes. The number of contracts i.e. number of

[02:05] transactions is higher on this 15 minute candle. What does it mean? That if we have high volume somewhere, if we have high volume somewhere, whether it is green or red, it does not matter. It shows green or red because if there is selling coming from there, then red is

[02:19] shown, if there is buying coming from there, then green is shown. But what does this volume mean ? Here when we apply volume from below. What does it mean? This means that this specific candle was formed around this specific price,

[02:32] around this specific price, around this place where the price came. How many people are interested here? How many people are interested? candle somewhere around here too. There was a candle made somewhere here. But here there will probably be a

[02:46] level where the number of people is very much interested in buying or selling it. That means the price point is for example ₹100. And selling it to someone at the price of ₹100 is very much liked. Buying someone. But this is a zone

[03:01] that is making everyone do what? It is attracting. It is attracting. Meaning that some big move can come from this specific zone. Because the volume has increased here. That is, what is the number of contracts, number of transactions in this specific zone

[03:16] ? He is big. He is big. I am high. This means that a big move has to happen from here somewhere. Now where will that big move come? When we talked about the last candlestick. But before that, the volume also

[03:30] Meaning people have become interested. Buyers also came, sellers also came, HAI also came. Ok? Big players also came, institutions also came. contracts and their transactions have started increasing a lot. Ok? So

[03:45] then buyers have come. Red volume made then sellers. Volume means how many people are interested in that specific price point [music] and how many contracts are being transacted there. Ok? Do you understand the meaning of volume

[03:59] So wherever the volume increases, we have to be alert. Ok? The simple meaning of volume is how many buying or selling took place in a certain time period like 1 minute, 5 minutes, 1 day ? How many people have bought or sold there? Right? For

[04:14] example, let us understand volume in this way. Like we go to the mall in it. And when we went to LV Mall, did you see a lot of people there? see you. There were only limited people there. There were one or two people. But the same thing because

[04:30] that specific LV store is very not many people interested in buying it. Only people like me or you will go there. You will also go with me. I will not go alone. Those who

[04:44] can buy, want to buy or can afford that specific LV. But you come to Chandni Chowk. You will not find space to enter there. Why? Because whatever is being sold there is within everyone's budget. It is

[04:57] in the budget. It is in the pocket. That means all those people can go there and buy and sell. So that market is an interesting market for everyone. There they get everything they want. That's why the volume is so high there. There

[05:10] is a lot of crowd there. But this LV store is beyond everyone's budget. We took a wallet and purse which contained ₹80,000. Would anyone spend ₹80,000 on a purse ? No. Will not do. So that's why it is beyond everyone's budget. There is no volume here at all. So interest means there

[05:25] is no interest here. But people are interested in that Chandni Chowk market because the things available there are according to their budget. So the same thing is here also that at this specific place, at this specific place the

[05:38] volume has increased. That means everyone is interested here. There are also interested buyers here. There is a lot of growth here, there are sellers here also. Sellers sold with pressure. Buyers should press in and buy because this price point is a support zone.

[05:51] Everyone here is interested. Everyone is interested here. So the number of people interested, the number of contracts that have transacted here indicates our volume. volume is indicated in a specific candle. The price boomed from here. Now imagine if

[06:07] someone had identified just this volume and from here he would have caught a good bottom and captured such a big move. Understand the power of volume? What is volume? Now let us understand further. Right? So high volume means move which

[06:20] is very high. That means there is a lot of participation from buyers or sellers. Low volume does not mean interest. Like LV Store. High volume means there is a lot of participation like the Chandni Chowk market. Now here as we have written, the

[06:34] price is the car and the volume is its petrol. Right? For the price to move, there petrol. Right? For the price to move, there same. Do panic stocks have volume? No, it does

[06:47] immediately get into trouble. Any small sale happens and they fall immediately. We go to buy but we don't get it because there are no people there. There are Ok? Got the volume ? Now let's come to the next point. What

[07:00] Does Volume Tell You? What does volume tell us? Volume explains to us how the entire trading ecosystem works. Volume tells the strength of. ? Volume tells us

[07:18] actual move that has come is a real move or a fake move, whoever thinks that brother, trapped in the breakdown, what will he see? Volume. Will see the volume. Trend Continuation: If the trend is increasing and the volume is also increasing.

[07:31] continue. The trend will continue. The trend is strong. Similarly, if the trend is increasing but the volume is falling then the trend will reverse from there. Reversal may occur. That means Right? [Music] Breakout breakdown confirmation, that is, if there's a breakout, a

[07:46] breakdown, and there's increasing volume, or when there's a breakdown, there's increasing volume. So this means that the breakout breakdown that happened is good. Meaning it is genuine. But the breakout happened with a big candle but the volume did not increase. This means fake. You may get trapped.

[08:00] Reversal signal means that the price is going up but the volume is falling, so a reversal can come from here also that means that now not many people are interested in going up. More people are shopping. There is no selling going on there. Ok? So volume plays a

[08:14] very important role in identifying all these things. First of all let us talk about the strength of a move. An actual way to identify the strength of the upcoming move is price going up on high volume. The price goes up. The volume is high. What does it mean? It

[08:27] is a bullish move. Price going down and volume high. This means a bearish move. Bearish move. Right? This means that the big players i.e. institutions or any take the price up or down because the number of

[08:41] transactions there has been very high. When will the number of transactions be high? When there will be buying in very heavy quantity. There will be sales in very heavy quantities and that very heavy quantity is beyond the capacity of us retailers. They do the institution. So it

[08:54] is very important to look at the volume. When will the Weak Move and Fake Move happen? When the price is going up the end volume is low. The volume is low. That means the upside move is weak. I don't want to do it, bye. The price is falling. The volume is low. This means that the

[09:09] downward momentum that is coming can reverse anytime because the volume is low. Now let us understand some examples of this. Look at this. Here we said that strength of volume with chart example which is why we started getting breakouts here.

[09:24] What did we get to see here? This breakout is coming. We Volume Volume Increase. Price was lying here. It was lying around this area. The volume was moving in a line. There was

[09:38] started giving a breakout. From here the volume started increasing. This means that the price is moving and the volume is also increasing. It is increasing. This means that this move is a genuine move. You should participate here.

[09:53] volume is giving you confirmation. The other candles must have given confirmation here. made a candle stick. See that candlestick forming here? Yes. ? Yes. Yes.

[10:10] pattern, every single trend line was a study about it. Yes. So gradually as you move forward in this series,

[10:23] Yes, a trend line is also drawn. There is also a Pay Chart Candlestick Pattern here. Here we have also read about bullish candle, bearish candle and reversal candle. We have also learned to trade the trend line. Now I am starting to understand trading. So make sure

[10:36] you like this series. Like the video. If you are a beginner, comment, beginner and yes, the one who wants to trade and trading with crypto and crypto does not mean that you can directly do spot and buy and sell,

[10:49] 30% tax will increase, the best way for this is that you can open your account on Delta, FIU registered platform in which I personally trade for a long time, it is very smooth and easy, here your account will be opened free of cost

[11:03] if you have a small capital, then you can trade in the market properly by using leverage. Rest, when using leverage, do liquidated. For others who want to open an account, the link is in the description box.

[11:18] Your account will be opened here free of cost. Ok? So, now let's talk about volume. This was a good example for us. Volume rose, breakout also occurred, a big move occurred. Ok? Now let's come to the next example. Look here, the

[11:31] price has broken down, the volume is increasing. If it was giving price breakdown. The price came down here too. The price came down here too. But the volume didn't do anything. But

[11:43] as soon as you look from here, look from here, the volume starts increasing from this place. There was a breakdown here around this area. But the volume started increasing from here. Right? So the volume is increasing. Fall is also coming. This means that this move is a

[11:56] genuine move. In this we can go to short [MUSIC]. Let's talk about some more examples. Look what's here too ? Here is a chart example of a weak and fake move. That means the price fell here and then fell again. This level has broken down. The

[12:12] everyone will go short. But we are smart traders. We won't shortchange here. Why? Breakdown with low volume. When the breakdown is coming, the breakout is coming When the breakdown is coming, the breakout is coming , the volume is low. This means we do

[12:26] n't have to trade. Now look what's rising here ? Retailers Cot. Retailers are stuck here because what happened here? There was a breakdown. Got trapped. How to avoid fake out breakouts

[12:38] Trapped here. After trapping up and volume rising on. Ok? Let's look at another good example. See what happened here too? The range formed, the range formed, the breakout came. But you will see here when the movement was coming, take the volume. Ok?

[12:55] Volume down, movement is coming. Here comes the breakout. Ok? And here we do comes the breakout. Ok? And here we do Retailers were trapped by the market. I fell right away. The volume started to increase.

[13:07] So wherever the actual move is taking place, the volume is increasing there. Where there is a fake move, the volume is comparatively low. Ok ? So this is how we have to use volume. Right? Now let's talk about the next point. We also use volume to

[13:21] confirm the continuation of the trend. That is, to identify the trend continuation, whether the not, or whether I should sit with this trend or not, volume also tells us that. How? When the price is going up and the volume is also increasing.

[13:34] What does it mean? The trend is strong. The trend is strong, which means it has to continue, which means continuous buying is happening and we should hold here. The second case is the price is going up but the volume is down. What does it mean? The trend is fake.

[13:47] The trend is fake, which means the trend is weak. We should not hold here. We should book the position or trail the stop loss or book profit from here because reversal can come quickly from here. Then there is this

[13:59] down trend. If the price is falling and the volume is rising. What does it mean ? There is strong selling. There is strong selling. That means we are seeing very strong selling here. That means we should hold on.

[14:11] Participate in the trend. The price is falling but the volume is also falling. The price is falling but the volume is also falling. What is the meaning of this? Selling Yes, selling is low. Selling is low. That means the price is falling

[14:25] volume is falling. Meaning the volume is over. It is not coming now. This means we don't have to sell. We will book our position there or try to capture the reversal. Ok? Let us

[14:37] one. This is a trend continuation chart example. If you see here, the price has given a Volume increased. Volume increased. Price moved and Price moved and

[14:54] getting a pullback, buying volume is coming and one thing will happen in this that when our trend continues and we are seeing a strong trend, whenever the price falls down, the volume will always come down around that area, that is, if there is a strong bullish trend, then

[15:06] whenever buying comes, the volume will increase. Whenever there is buying, the volume will increase and volume will always be low. No matter how many selling people are coming, the volume will always be low. This means never sell in a strong bullish trend. Just

[15:22] Find good buying zones around pullbacks and buy. Do it right. The volume is increasing. Do it right. That means what is our move? It is a genuine move. Now look at the next example here. The price fell. What grew here? Volume. Volume increased. The price is continuing to fall. The

[15:38] volume is increasing. Then here came the selling candle. The volume rose. No No volume was found in the buying candle. But in the selling candle, the price will fall again and the volume will rise, which means the trend will continue. The direction is correct.

[15:52] What is direction? It will only go bearish. If we want to identify it, we will have to look at the volume. Candle is coming in the same direction. The volume is increasing. This means keep selling. A buying side candle is coming in the same direction. The volume is

[16:04] increasing. That means keep saying bye. Selling scenarios are not to be seen. Right? Now let's come to breakout breakdown confirmation. The biggest confusion that arises in the minds of traders is

[16:21] strong. It is strong. There is a valid breakout. Here we can go. You can enter on breakout. Breakout is coming but volume Fake breakouts. There is a fake breakout. That means there are chances of getting trapped. Don't participate. In the

[16:36] second condition, breakdown is coming but the volume is also very high. Strong breakdown means we can short here. Breakdown is coming ? Fake breakdown. Fake breakdown means that now we do not have to participate here. Let us

[16:52] see some examples of this. This is the perfect example. What was it? The trend line which we have already read. We have studied the chart pattern here also. Volume. There was volume. The breakout came as volumes increased. And boom, that means

[17:07] this breakout is a genuine breakout. After this, look at the next example here also, range was formed, breakdown came, volumes were formed or what does it mean? This is a genuine breakdown. Here we can go. Then we will talk about this. Next reversal signal.

[17:22] How to identify reversal signals? The price is falling. For example, let us create a situation here where our price is seen falling from one place here. reached. Here suddenly a big spike candle

[17:37] appeared. Right? Right now it is coming slowly because from here we will see good volume increasing. But around this area we will see the volume getting low Already fallen from here. From point A to point B, the market has fallen. But

[17:50] sometimes it also gives us volume reversal signals. Somewhere here, suddenly a candle will be formed. Some such candles will be formed which may come down a little and become such bullish candles. But the volume of this candle will be very high comparatively to these candles.

[18:04] This means that now we have to remain alert here. Now two things will happen here. Or it will fall down suddenly. Now if it has already fallen from here then the chances are very high that it has already fallen this much. The volume is now low.

[18:19] No selling is required. Suddenly we saw a spike in buying volume. find any one of the confirmation candles which I have told you in the last video. If you have Go and watch the last video. One can

[18:37] Place SL below it and capture the entire trend. If there is any such see a volume base spike. Same thing if the price has gone up, right? Slow

[18:49] and steady is going up. A candle was made here. A candle like this was formed and we got a spike in volume from the bottom. Otherwise the volume was low but suddenly the volume increased. This means you should be alert around this area. Wait for any one

[19:01] confirmation candle that gives you a reversal sign. Hit sell, place SL and capture the entire downside move. Ok? So volume helps us in this way also. Let us look at some examples of this. Look, the price was

[19:16] look at some examples of this. Look, the price was falling. What happened suddenly somewhere here Selling was already happening but suddenly the volume increased. We saw a huge spike in volume on this candle compared to the previous candles. And

[19:30] what happened after that? If you look at this single doji, Doji candle that you see here, you can zoom the screen on this single one. Look at the volume of this single doji candle. What happened? After that

[19:45] the price reversed. Ok? And somewhere or the other, buyers had entered here. This was a support zone. And sudden volume spike. This also means that the volume reversal sign gives us that the price is reversing from here. Now look,

[19:57] is reversing from here. Now look, a big player started selling here. Sudden support at volume spike Sudden resistance for volume spike This means a big player

[20:11] is involved here. Is involved. That means he has entered. This means that from here now a fall can come or buying can come from here. Look here, there is a sudden spike on this candle. The price fell from here and we got to see a good number of continuous back to back candles.

[20:24] So here, if someone had caught this thing, he would have entered on time and would have created a complete short position and would have sat down. Ok? So I hope you have understood the scenarios I told you and what volume

[20:38] tells us. Let me give you a recap once again. Strength: Whether the move that is coming is genuine or not. The volume should appear to be increasing. To identify weak moves and fake moves, we will have to look at the volume. The move is coming but the

[20:51] volume is not. It's a fake move. The move is coming but the volume is high. This means genuine , volume is increasing. It's a good thing. The trend is increasing, the volume is decreasing, there are signs of reversal. In a breakout breakdown, if the breakout

[21:05] , do not go. Breakdown is coming, volume should increase, if it is not coming, do not go. And then a large volume spike candle appeared around the reversal signals i.e. sudden support. a large volume spike candle appeared around the reversal signals i.e. sudden support.

[21:19] mean a reversal from there. Be ready there. Now how do we apply volume ? I will also tell you how to apply volume on the chart. First of all I will also tell you how to apply volume on the chart. First of all you have to open Trading View

[21:31] and go to Style and do the setting which we are talking about. How to see average volume? That means we also look at the volume. But we have to put it on the chart once and show it. This is the average volume line. This makes it

[21:44] easier for us that [music] may be moving at an average level like the volume but suddenly it starts increasing. If the average volume line starts increasing gradually, it means that we are going to move somewhere. Either it will come for buying or it will

[21:57] come for selling. Ok? [Music] Look here too, the average volume, the average moving volume line here was very high. And after that the price came down. And the line of average volume is moving at one place below. So what is the price?

[22:09] Sitting in the range. Ok? Ok? So this line of average volume also volume is this much. There will not be any major move right now. But as soon as the average volume line starts moving in the upward direction. She starts showing big moves.

[22:22] This means that our chart may now show a big move somewhere. How to apply this we have to come to Trading View. You have to go to the indicator section and directly type volume here. Here you will write V O L U M E. If

[22:39] you write volume, the volume will appear directly. Put it on the chart. Right? went to the chart, see, volume has been applied here. Now you must have started seeing the chart volume here. So learn to use it. Because it is very helpful

[22:54] in giving you confirmation. That is, to give you confirmation, to give you validation. Is this a right move or a wrong move ? We have to participate or not participate. This tells us the volume around this particular area

[23:07] in this particular candle. Look, this was a support zone. What did you see? Volume volume spike. And here there was a sudden volume spike in just one candle. Then came down. But if you had bought here, you would have captured a big move. And is this

[23:20] How did it get its identification? Volume. The volume gave us the decision whether we should go because after falling the price came here and stopped here. After stopping, the

[23:32] After it was low, suddenly a big candle came. The volume spike arrived. You go bye, hit SL and capture the entire move here. So how well did volume help us identify the trade or trend or strength. Now

[23:47] you can apply average volume on the chart. For this you have to go to settings. Right? Have to go in style. And on this style, you will make this volume moving average ok. This will come. If you keep this on,

[24:01] volume here but suddenly there was a spike. That means the volume increased. Now some ? So you can keep this also which will is sitting. When your average volume is stuck very low i.e. very

[24:16] Mostly it will be in the market range there. So average volume helps you to know when the market is in range. That means it shows that brother, the average volume is currently going down. You do n't have to trade right now. But when the average volume

[24:30] gradually starts increasing, that means now you will see volatility momentum at your place of trading. you will see volatility momentum at your place of trading. volume candles, are telling you everything here. Now you understand what

[24:42] volume is? What is yes? What does volume mean? How many people Is interested. Yes. So far what it said in the beginning is that volume buying means buyers or selling means sellers.

[24:55] How many people are interested at that specific price point. How many transactions are taking place there? How big are the contract transactions taking place there? He tells us that there is a good amount of volume here. This means

[25:08] a big move is about to happen here. As a retail trader, we have to be ready because we may trader, we have to be ready because we may If you liked this video, learned something from it, or found the volume clear,

[25:23] make sure you like this video. Subscribe to the channel and if you are a beginner, comment "beginner" so that we can know beginners we are able to help in learning trading through our videos and this series, free of cost. See you

[25:36] in the next episode. Till then you watch all the videos of all the episodes and learn trading the right way. See you in the next video. Till then by-b see in the next video. Till then by-b see you. Jai Hind.