Volume is a key indicator of market activity and liquidity; high volume often suggests strong interest in a stock, while low volume may indicate a lack of interest or liquidity.
Traders and investors pay close attention to volume because it can provide insights into the strength or weakness of a price trend. For example, a price move accompanied by high volume is generally considered more significant and likely to continue than the same move with low volume. Volume is often displayed as a series of vertical bars or histograms below the price chart, and it’s commonly used in conjunction with other technical indicators to make trading decisions.
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