It is worth noting that the number of actual transactions is not given in the trading volume, it is the number of assets traded that is counted. So, if five buyers purchase one share each, it looks the same as if one buyer purchases five shares. Export growth can be divided into the expansion of existing trade flows (the intensive margin) and the addition of new products and markets (the extensive margin). This indicator assigns all product growth—and contraction—to one of seven bins. At first glance, you may think that you should buy ETF X because it appears to be more liquid – there are more units changing hands with a small bid-ask spread.

This indicator evaluates the growth potential for a country’s exports by comparing the compound annual growth rate (CAGR) of its primary exports to their worldwide growth rate. A growth rate above world growth implies an increase in market share. Countries whose primary exports are in high growth markets may be well positioned for future growth. Furthermore, if the reporter’s growth lags behind world growth, this may signal the potential for further expansion in the relevant market or, on the other hand, the existence of barriers inhibiting growth. The indicator also reports each product’s value share of the selected country’s total exports.

Planning and Investments

When a stock is not traded very often, and there is limited buying interest, an investor may have a difficult time unloading their shares. High volumes can indicate bullish or bearish sentiments and the level of investor conviction regarding a particular stock. Beneath the surface of a move higher or lower, trends may be forming—or fizzling into a reversal. That’s why trading volume definition traders look for other indications of enthusiasm when they want to confirm or refute a price signal. Trading volume, which measures the number of shares traded during a particular time period, can help. Real traders, who transact in the market based on their own evaluations and expectations of market movements, only make up 10% of the total volume in US markets.

If a stock is rising on low volume, it may simply reflect an absence of sellers. And if a stock is declining on low volume, it might mean there are very few bids. While swings in trading volume may not be enough on their own to reveal changes in a trend, they can give you a sense of how much strength there is behind a move. When analysing volume there is a basic framework that traders can adhere to with respect to using volume to improve their trading. Traders can use volume to determine the weakness or strength of a move; the more volume the stronger the momentum.

Average True Range Atr

For instance, some investors might look at a big price move, either higher or lower, as more meaningful if it comes on big volume. Conversely, some investors would distrust a big move higher, and think it’s a fake rally, if it is done on low volume. There are a few ways that trading volume can help with evaluating stocks and broader market trends as a whole.