Trading volume indicates how many units of a financial instrument are traded over a specific period. It reflects market activity and liquidity and is widely used in technical analysis to confirm price movements. A price increase accompanied by high volume is considered more meaningful than the same move on low volume, as more market participants support the movement. Conversely, declining volume during a price move may indicate weakening momentum.
Volume-based indicators such as On-Balance Volume (OBV) or Volume-Weighted Average Price (VWAP) transform raw volume data into analytical tools. In the forex market, true centralized volume is not available due to its decentralized structure; therefore, tick volume is commonly used as a proxy.
