Sell 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.

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 sell right now, so I'll place a limit order for $100 above 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 Sell Volume indicator on the Main Chart product under the Orderflow & Open Interest indicators. There are four variations of this indicator:

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

• Sell Volume [Aggregated]: Calculated at each candlestick and aggregatged across all supported exchanges

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

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

Sell volume can also be used to filter across different trade size which can identify activity of specific groups of traders, such as institutions or retail traders. For example, if sell volume is increasing and the majority of the selling activity is coming from institutional traders, it may be an indication that positions are being accumulated by large, sophisticated investors, which can be a bearish sign. On the other hand, if sell volume is increasing and the majority of the selling activity is coming from retail traders, it may be an indication that price is being driven by hype or speculation, which can be a bullish sign. You can see how to filter volume by trade size to identify large vs. small trade activity in the image below.