Every trade has someone on each side. Volume counts how many shares changed hands in a day. A price can jump with a crowd, or with very few.
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A move with a big crowd says many people agreed on that price, that day. A move on thin volume says few did. Both are about a day that is over.
January 2021, GameStop, a US games shop. On the 12th it closed at $20, with about 7 million shares traded. On the 22nd: $65, and 197 million shares. A crowd 28 times bigger.
Then the rule bent. From the 22nd to the 27th the price went from $65 to $348, more than five times, while the shares traded fell by half. The biggest jump came with a smaller crowd.
Next time something jumps, look at the volume bars under the price. Write what they tell you about yesterday, and what they can’t tell you about tomorrow.
Volume says how big the crowd was. GameStop jumped most on a smaller one, so it is memory too.
Do it today
Next time something jumps, check its volume.
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