Hello.

I am very new to trading and I'm just trying to do some research but I can't find an answer to my question about volume anywhere. As far as stocks are concerned in day trading, volume is the amount of trades done per candle tick, I understand. What I don't understand is whether volume is the amount of stock sold in a bear candle or the amount of stock bought in a bull candle. Or is it a mixture of both where a bear candle's volume would mean that more shares were sold than bought and a bull candle's volume would consist of more shares bought than sold.

And if it is a mixture of both sold and bought, how is it possible that there could be more sold than bought or more bought than sold? Is there a another entity other than a buyer and a seller that holds these stocks? If so, what is that?

Thanks.

mirk 

Hello. I am very new to trading and I'm just trying to do some research but I can't find an answer to my question about volume anywhere. As far as stocks are concerned in day trading, volume is the amount of trades done per candle tick, I understand. What I don't understand is whether volume is the amount of stock sold in a bear candle or the amount of stock bought in a bull candle. Or is it a mixture of both where a bear candle's volume would mean that more shares were sold than bought and a bull candle's volume would consist of more shares bought than sold. And if it is a mixture of both sold and bought, how is it possible that there could be more sold than bought or more bought than sold? Is there a another entity other than a buyer and a seller that holds these stocks? If so, what is that? Thanks.

There are always as many buyers as there are sellers, as each transaction needs a buyer and a seller. Stocks can be bought and they can be shorted. Therefore any transaction can be composed from the following

(1) somebody buying stock, somebody else selling stock
(2) somebody buying stock, sombody else selling stock short
(3) somebody buying to cover a short position, somebody else selling stock
(4) somebody buying to cover a short position, somebody else selling stock short

For stocks transactions (1) is the most frequent one.

A bull candle shows that buyers are more eager to buy as sellers are eager to sell. Buyers are willing to buy the (higher) ask via a market order, while sellers sell the ask via the limit orders sitting in the order book. This drives price up.

A bear candle shows that sellers are more eager to sell than buyers are eager to buy. Sellers are willing to sell the (lower) bid via a market order, while buyers buy the bid via the limit orders sitting in the order book. This drives price down.

Thanks for the response.

Steven Sontag 

I wonder about having bars that are equal in volume. Is there software that does this?

Ninja can create Volume Bars.

Also, there are overlays that will create an Equivolume Bar that expands with higher volume.

Examples of Volume Bars, and an existing thread that covers this topic.

Volume Bars-Anyone have experience with these??? Ive seen them before never heard anyone speak about using them, just curious. The bars Im referring to is the one that get fatter the more volume that is in them. Thx In Advance R

Mike

Steven Sontag 

I checked them out and they are fake. All bars are the same distance from each other. To be true equal volume bars the distance between bars needs to depend upon the volume.

Somebody who did not bother to have a look into the user manual...


You can select between


(1) equidistant bar spacing -> in this case the time-axis is non-linear, the option is only available, if you load a single bar series on your chart

(2) non-equidistant bar spacing -> in this case a linear time axis is used, and volume bars are spaced according to the time they take to develop

Steven Sontag 

I checked them out and they are fake. All bars are the same distance from each other. To be true equal volume bars the distance between bars needs to depend upon the volume.

Maybe you did not see the CandleVol ChartStyle script.
This ChartStlye makes the candles various sizes that adjust with volume.
(make the 'bar width' at least 15 to make the volume changes more noticeable)

But all of this is covered in the thread Mike posted.

Steven Sontag 

I checked them out and they are fake. All bars are the same distance from each other. To be true equal volume bars the distance between bars needs to depend upon the volume.

Hi here is a screenshot of a 700 volume chart from the Ninja Trader platform.. You can see that the bars are different in range because of the distance price has travelled during the exchange of contracts between buyers and sellers. Hope this helps