Trade on the basis of price and volume in Equity Markets
Different people follow different strategy to trade in the equity markets. Some traders use various technical indicators to predict the prices of the stocks and trade beneficially in the stock markets.
Some people use the basic price and volume action to determine the future behavior of the prices. The price and the volume action is the most basic thing and other indicators are based on these fundamentals. The volume decides the total number of people trading a particular security and shows the interest of the traders in the particular stock.
In stock market trading, volume based indicators are extremely useful. Volume is a not a exact opening and exit instrument, though, with the aid of certain technical indicators, opening and getting out signals are produced by staring at price action and volume based indicator.
Technically, if we define volume then it means the total number of shares bought and sold each day in any given financial instrument. This is one of the most accurate ways of gauging money flow. Traders make use of Money flow to determine the overall supply and demand characteristics. The volume is very powerful tool, but many traders and technical analysts do not use it, as this is a simple indicator. Still, many traders believe the strength of using the volume indicator and use it to get maximum profit.