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Can someone please explain 'Volume' in a trade?

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LostInTransit

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24 August 2009
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Hi

When I use Yahoo Finance graph, I can see like many other graphs available out there, there is a 'volume' chart at the bottom of the graph.

For example for stock XYZ, at a given graph point it shows (say) $3.94 and the corresponding volume shows (say) 45,000.

What I want to know if the volume is total of sellers AND buyers OR sellers only OR Buyers only?

How would I know or find volume of buyers or sellers on the these free graph pages. Same applies to Comsecc.

Thanks
 
On those yahoo finance etc graphs the volume tells you the number of shares that were traded at that price. Obviously the number of shares sold = the number of shares bought. As for the actual buyers and sellers you have no way of knowing! There could have been 1 buyer and 100 sellers, or the other way around!

Cheers,

Beej
 
on the comsec watchlist there is a column for volume which shows you the number of shares that were transacted in a single day.
 
Ok thanks.

My interest is really knowing if there are more buyers or sellers at any given Volume. Another words are they more buyer then sellers or visa vesa. Is there anyway knowing this.

I have seen some other sites they have an down pointing arrow and up pointing arrow next to the stock with percentage written next to them. I was hoping something like that.
 

You will find that there is the same number of buyers and sellers.

What volume tells you, combined with price direction, is how keen the buyers and sellers are.
 
Ok thanks .

So how do you know how keen the buyers are compared to how keen sellers are. I am sorry for not getting this quite ..yet but I will soon I am sure.

When I look at the graph, I see the information but not sure how to interpret when it comes to 'Volume'. One would like to know if there are more of the buyers or more of the sellers.
 
LostInTransit said:
Ok thanks.
My interest is really knowing if there are more buyers or sellers at any given Volume. Another words are they more buyer then sellers or visa vesa. Is there anyway knowing this.
Click to expand...

That's a lot of logical fail right there.

A buy or sell transaction is a transfer of shares from one entity to another, for a price. You cant sell your shares to noone, nor can you buy them off noone.

Thus the buy and sell side are equal. The variable is price.

Unless your talking about what individual entities buying or selling at any price level, and due to the nature of the market that's almost impossible to work out for the most part (and also irrelevant) until after the fact substantial holding notices come out.

Google "On Balance Volume", thats probably the indicator you're after.
 
LostInTransit said:
So are you saying if the volume is =100 then
there are 50 buyers and 50 sellers

That can't be right. Is that correct?
Click to expand...

No if volume = 100 there is

100 shares sold AND 100 shares bought.

Think about it if you are an apple farmer going to market to sell your apples.

If you sold 100 apples to customers how many apples where bought?

It has to be the same. got it?
 
LostInTransit said:
So are you saying if the volume is =100 then
there are 50 buyers and 50 sellers

That can't be right. Is that correct?
Click to expand...

No, he is not saying that. Lost - read the link provided by knobby, it will help you out.
 
I think he is talking about market depth.

Some platforms provide a market depth which will show you how many individual buyers (Bid) or sellers (Ask) there are for a particular price and the volume of the bid/ask.

How ever this is not a very reliable form of analysis in most cases.
 
Got it . Thanks for explaining to a beginner
 

That's it!, that's what it is called. And you are saying 'not a very reliable form of analysis in most cases' . Ok but how would I read this information by looking at those free charts like in Yahoo or Comsec?
 
Timmy said:
Lost, also have a look at this thread: Buy and sell volume?

It might help too.
Click to expand...

Thanks . Great link to my interest. Also thank you Knobby22 for your link as I will now study.

Thank you for your quick support. I do appreciate your constructive answers as most of you (thankfully) do realise that this is the beginners lounge and answer are explained or directed as such.
 
Timmy said:
And here is the specific post I was looking for to answer your question:
Click to expand...


Yes yes and yes! Thank you Timmy for spending time to help me understand.

I may have asked my question incorrectly at the beginning but believe me but I some times find it soo intimidating to ask a question as sometimes you are made to look like a fool by some of the answers you get.

This was very encouraging experience for me as some of you experts might take it as granted.

Thank you all. I will come up now with more questions as I learn more. Thank again.
 
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