Volume: activity, candle colors and moving averages
Volume records the quantity traded during a candle for the selected market and venue.
Before this lesson
These lessons provide background; you can still read this page now.
What the indicator measures
Volume records the quantity traded during a candle for the selected market and venue. Every matched transaction has a buyer and a seller. A green volume bar does not mean the displayed quantity was net buying, and it cannot identify institutions or explain why an execution occurred.
Calculation and units
The basic plot uses each candle’s volume field. A volume moving average is SMA(V, N): sum the latest N candle volumes and divide by N. Keep base quantity, quote notional and contract counts separate. A number from one market is not automatically comparable with the same number from another.
Worked educational example
In a constructed three-bar example, volumes 100, 200 and 300 have an average of 200 units. A new bar at 400 changes the rolling three-bar average to 300. An unfinished bar has had less time to accumulate activity than a closed bar, so its lower height is not yet evidence of fading participation.
Reading it without overclaiming
Compare activity with price displacement and a comparable time window. Large volume with little progress is compatible with several explanations, including offsetting aggressive orders and passive absorption. Candle-level volume alone cannot distinguish those explanations. News, session changes and feed gaps also alter the baseline.
How TradingHub implements it
TradingHub enables volume by default and offers a 20-bar SMA; MA period 0 disables that line. Volume and its average can be placed in a pane or over the chart. The built-in history depends on the chart’s current bar window. Candle color follows price direction, rather than an exchange classification of aggressive buyers.
Comparisons that matter
Use order flow for executed buy/sell classification, OBV for close-signed accumulation and Volume spike for activity relative to an average. These are different transformations. Check the source volume unit and the completion time of the bar before interpreting a sudden change.
A reproducible chart review
Open the existing Trading chart and choose the same market, interval and closed observation time as your comparison. Record every calculation parameter before changing one at a time. Match source fields, history length and the bar window. Native indicators calculate from the supplied visible slice; Indicator Studio calculates from its available chart snapshot. A difference after panning may therefore be a window or warmup effect rather than a new market event.
Limits and next lesson
The illustration uses constructed candles, not a dated market observation or a backtest. A live candle can change until it closes. Missing history, volume units and implementation conventions limit comparisons. No indicator guarantees a direction, an execution price or protection from loss. Use the related lessons to separate definitions, observed values and possible explanations; a correct quiz records learning progress, not trading competence.
Knowledge check
Does a green volume bar prove that its volume is net buying?
- No; candle direction does not classify every execution
- Yes; every green-bar trade is a buy
- Yes; it measures new capital entering the market
Show explanation
Each execution has both sides. Bar color and total activity do not establish net aggressive buying.
Interactive checking needs JavaScript; the lesson and explanation remain readable.
Primary sources and scope
Educational scenarios are not execution guarantees, forecasts or personal recommendations. Check current product rules at their source.
Content revised: . Editorial responsibility: TradingHub. No independent professional certification is claimed.