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Volume is simply a count of how many units (shares, contracts, or lots, depending on the market) changed hands over a given period. On its own it's just a number, but read alongside price it adds a layer of confirmation that price movement by itself doesn't provide -- the same size price move can mean very different things depending on how much volume accompanied it.
A price breakout above resistance on unusually high volume suggests real participation behind the move -- many market participants agreeing on the new direction -- and is generally considered more likely to hold. The same breakout on unusually low volume is treated with more suspicion, since it may reflect a lack of real conviction and can be more prone to failing and reversing back through the level it just broke.
Volume is also used to judge trends: a healthy uptrend is often accompanied by higher volume on up-moves and lower volume on the pullbacks in between, showing that buyers are more committed than sellers at each stage. When that pattern breaks down -- up-moves happening on shrinking volume -- it can be an early sign the trend is losing the participation that was driving it, even while price is still technically making new highs.
One practical limitation: reliable, complete volume data is easy to get for centrally-traded instruments like stocks and futures, but forex trading happens across many decentralized venues, so retail forex platforms typically show broker-specific "tick volume" (a count of price changes) rather than true traded volume -- still useful for relative comparison, but not a literal count of currency traded globally.
Real-World Example
A stock breaks above resistance on unusually high volume, more shares traded that day than in the prior two weeks combined, and the breakout holds and extends over following sessions. A different stock breaks a similar resistance level on volume barely above its recent average, and within days it reverses back below the level. Same chart pattern, same type of breakout, but the volume context told a trader in advance which one was more likely to actually hold.
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