Volume & Liquidity

The volume of a security is the number of shares that are traded during a trading session. When a buyer and seller agree on the number of shares and a price for a security, a trade takes place. The volume of security also determines liquidity, or how easy it may be bought and sold. The higher the volume, the greater the liquidity, and the simpler it is to purchase or sell shares. On the other hand, the lower the volume, the more illiquid the security is and the more difficult it is to enter and exit trades.

The same logic applies to cryptocurrencies: replace security with cryptocurrency and shares with coins/tokens.

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