Financial Glossary Header Image

Volume Indicators

Updated on July 18, 2023

Volume indicators are tools that show how much trading activity or the number of contracts being traded is happening for a particular commodity. These indicators help traders and investors understand how actively a commodity is being bought and sold in the market.

How are volume indicators used and interpreted?

Volume indicators are used to analyze the level of trading activity surrounding a commodity. They give information about the total number of contracts or shares traded during a specific period of time. By looking at the volume of trades, traders can get an idea of the level of interest and participation in a particular commodity.

If a volume indicator shows high trading volume for a commodity, it suggests that many buyers and sellers are actively involved in trading such a commodity. This could indicate increased market interest or potential price movements. On the other hand, if the volume indicator shows low trading volume for a commodity, it means that there is less activity and fewer contracts being traded. This could indicate lower market interest or a lack of significant price movements.

Popular Volume Indicators

On-Balance Volume (OBV)
Volume Moving Average (VMA)
Accumulation/Distribution Line (ADL)
Chaikin Money Flow (CMF)
Open Interest (OI)