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# Volume

Posted in Indicators of technical analysis

Volume means the number of Contracts that were agreed among traders. In other words, if today's Volume is 10,000, it means that 10 thousand contracts were traded today. While the market Price represents the Demand and Supply Equilibrium, the Volume presents the number of contracts agreed.

Please realize that in Futures trading the contract has two sides - the Buyer and the Seller. It means that the volume 10 thousand represents not just 10 thousand Traders, but 10 thousand Buyers and 10 thousand Sellers at the same time. They agreed on 10,000 contracts.

It is true just in case if every trader Bought or Sold just one contract. If someone Bought or Sold more contracts, there could be less trades done, but the trades can still represent the same Volume of 10 thousand contracts. It is theoretically possible that 10 Buyers bought 1000 contracts each, while 50 Sellers sold 200 contracts each. There are any combinations possible.

The Volume can not be defined on every market and every timeframe. That is also the reason why we can find more ways of Volume calculations.

• Volume representing the number of contracts traded (e.g. contracts of Wheat, Corn, Shares etc.). It is the most accurate type of Volume, that is just described in this article.
• Volume representing number of trades - i.e. not the number of contracts agreed, just the number of trades. It is considerably less accurate. If e.g. 1 trader would Sell 100 contracts and another one would Buy 100 contracts, such Volume would be just 1, not 100, because just 1 trade was done.

Volume is usually plotted by a histogram, below the price chart.