Why volume surges?
Volume is a two-sided matter. When we have volume =1, we have 1 buyer and 1 seller. Volume does not show us how many buyers or sellers we have in the market. When the price rises, we have more buyers who are willing to pay higher prices than sellers (the demand is greater) and when the price declines, we have more sellers willing to sell at cheaper prices (the supply is greater). However, the appearance of a big surge in volume means that a large number of shares are being transferred from one group of market participants to another. It is at this point that the market can become “overbought” or “oversold”. At this point, a large number of traders have satisfied their demands – those who wanted to sell have sold and those who wanted to buy have bought. At this point, we have a shift in the supply/demand balance and a change in the market mood and, as a result, a trend reversal. In simple words, if after a long downward run under the pressure of sellers you see a big volume surge, the m
