Buy Volume

Overview

Volume is at the center of the trading mechanism; without it, the price wouldn't move. There are two types of orders: market (aggressive) orders and limit (passive) orders. Market orders are also known as taker volume and limit orders are also known as maker volume.

A market order is essentially an order placed by someone who wants the trade to execute immediately ("I don't care what the price is; I want to execute right away"), and is thus referred to as an "aggressive" order.

A limit order is essentially an order placed by someone who is willing to wait for the price to come to them so they can execute the order ("I don't think it's a good time to buy right now, so I'll place a limit order for $100 below the current price and wait for it to be executed" – thus known as a "passive" order).

Volume is linked to market orders (the orders that have been executed). So, if volume is $5 million in 30 minutes, then we know that this $5 million was through market buy orders and market sell orders. In other words, buy volume is really market buy volume and sell volume is really market sell volume.

Where Can I Find This?

You can access the Buy Volume indicator on the Chart product under the Orderflow & Open Interest indicators. There are four variations of this indicator:

• Buy Volume: Calculated at each candlestick and for a single selected exchange

• Buy Volume [Aggregated]: Calculated at each candlestick and aggregated across all supported exchanges

• Buy Volume [Cumulative]: Summation of volume over determined look back period and for a single selected exchange

• Buy Volume [Aggregated Cumulative]: Summation of volume over determined look back period and aggregated across all supported exchanges

Buy volume can be used to filter across different trade sizes, which can identify the activity of specific groups of traders, such as institutions or retail traders. For example, if buy volume is increasing and the majority of the buying activity is coming from institutional traders, it may be an indication that positions are being accumulated by large, sophisticated investors, which can be a bullish sign. On the other hand, if buy volume is increasing and the majority of the buying activity is coming from retail traders, it may be an indication that price is being driven by hype or speculation, which can be a bearish sign. Below you can see how you can filter volume by trades sizes to identify large vs small trade activity.