Trading Volume is one of the most important indicators used by traders and investors to understand the strength and activity of a particular security or the overall market. It represents the total number of shares or contracts traded for a specific asset during a given period — typically a day. A higher trading volume often signals greater investor interest and liquidity, whereas lower volume may indicate reduced market participation.

In simple terms, Trading Volume helps market participants assess the momentum behind a price movement. For example, when a stock’s price rises on high volume, it suggests strong buying interest and confirms the trend’s strength. Conversely, if prices move with low volume, the trend may lack conviction and could reverse. This makes trading volume a key component in technical analysis and decision-making for short-term and long-term investors alike.

Analysts often use volume-based indicators such as Volume Weighted Average Price (VWAP), On-Balance Volume (OBV), and Volume Oscillators to identify potential entry and exit points. These tools help confirm breakouts, reversals, and support or resistance levels more effectively than relying on price action alone.

In the broader market context, volume trends can also signal shifts in market sentiment. A surge in trading volume across indices like the Nifty 50 or SENSEX can indicate institutional participation or major economic announcements influencing investor behaviour. Monitoring daily and weekly volume reports helps traders stay informed and manage their risk efficiently.

Understanding and analysing Trading Volume empowers investors to make more informed decisions, improve timing, and validate market trends — all while ensuring trading activity aligns with sound research and regulatory guidelines set by SEBI.