|
timeiz2short:
Correct. There is the same shares bought and sold even when volume is high. However, high volume represents interest to the direction of the shares. As Airelon says, if shares rise on high volume, this means the general direction ot the shares is up. Why is that so? Let's elaborate.
High volume means: more transactions, despite the fact that the amount of buying and selling is the same. (It has to, otherwise transactions won't occur). When price rises, it is understandable that some sellers would want to take some profits of the table. But why there are also the same amount of buying at this higher price? They must buy in 'anticipation' that price will rise even more. Otherwise, what is the point of buying? Thus, high volume indicates the direction of the shares even when there is the same amount of buying and selling occuring during a specific period.
|