If you take a closer look at the trading process you will notice that the traded volume is moving the price at a given moment in time for example if we send a market order to buy 10 lots of an asset and the nearest opposite sell limit order has a volume of 1 lot then we will buy it and redeem the next level after it and then the next and so on until the entire order in 10 lots will be . Trading volume is a measure of how much of a given financial asset has traded in a period of time for stocks volume is measured in the number of shares traded and for futures and options it is . Tools used for price action trading since price action trading relates to recent historical data and past price movements all technical analysis tools like charts trend lines price bands . Why volume price analysis is so important to traders and investors volume is very important for two main reasons shows the psychological level of traders and is a good tool to use to check or confirm a trend for instance when the price of an asset is moving up with a high volume it indicates that the trend is stronger therefore creating a bullish signal. Volume price trend indicator vpt a technical indicator consisting of a cumulative volume line that adds or subtracts a multiple of the percentage change in share price trend and current volume
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