What Is Trading Volume? How to Read Volume on a Chart
Trading volume is how much of an asset was bought and sold over a certain period. On a chart, it's shown as bars below the candles.
What volume shows
Volume reflects interest in an asset. If the price rises on high volume, a lot of money is behind the move. If on low volume, the move may turn out to be weak.
| Situation | How to read it |
|---|---|
| Price up + volume up | The move is confirmed |
| Price up + volume down | Buyers are running out of steam |
| Breakout on high volume | The breakout is more reliable |
| Breakout on low volume | Higher risk of a false breakout |
More on breakouts in our articles on breakouts and false breakouts.
Volume and liquidity
High average volume means good liquidity: trades go through quickly and with a tight spread. Small coins can have volume so low that the price is easy to move.
Be careful
- Volume differs from exchange to exchange — look at major platforms.
- Volume can be faked on unknown coins and exchanges.
- Volume is a confirmation, not a standalone signal.
How to read a chart as a whole is covered in how to read a chart.
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- Volume is how much of an asset traded over a period.
- A move on high volume is more reliable.
- Low volume means weak liquidity and a risk of manipulation.
Frequently asked questions
Where can I see volume?
Below the chart on the exchange or in your trading platform. For coins, it helps to check total volume across many exchanges on aggregator sites.
Is volume measured in coins or dollars?
It can be either. Dollar volume is more convenient for comparing different assets.
Does high volume always mean the price will rise?
No. High volume also happens during sharp drops, for example during panic selling.
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