Ground volume
Intermediate · 3 min
Most attention goes to the days when a share trades heavily. This lesson is about the opposite: the stretches when almost nobody buys or sells. It covers how to recognise one against the share's own normal, the four places it tends to appear, and why quiet on its own tells you nothing about which way the price will go next.
You open a share you have been watching and nothing is happening. The price has barely moved for weeks, and the volume bars under the chart have shrunk to stubs. Is that a share nobody wants, or a share nobody wants to sell? The chart looks the same either way. This lesson is about reading that quiet without pretending it answers more than it does.
- ground volume
- A stretch of days when a share's volume shrinks to an extreme low compared with its own recent normal. It has no fixed number. You judge it against the same share's busy days, never against another share or a rupee figure.
- shakeout
- A dip or a choppy sideways stretch that traders believe is meant to make nervous holders sell cheaply, before a rise. Whether any one dip was deliberate cannot be seen on a chart.
Relative, and it moves
A share that normally trades 50 lakh shares a day and drops to 8 lakh is at ground volume. A share that normally trades 1 lakh a day would call 8 lakh a frantic day. So you only ever compare a share with itself. Even that comparison drifts. A share goes through busier and quieter years, and the ground volume in a busy year can be higher than the busiest day of a quiet one. You can put rough numbers on it, but never exact ones.
Four places it tends to appear
- A weak market. When the whole market is flat and few people are trading, prices barely move. Holders don't want to sell and buyers don't want to buy. Quiet shares are everywhere, so a quiet share on its own means little. Long-term buyers often start buying in these stretches.
- The end of a long fall. A share that ran up too far usually falls for a long time, and often below where it would normally trade. During the fall, quiet days appear and are quickly swamped by more selling. Near the bottom it changes. Those who wanted to sell have sold, and the rest won't. Quiet days come often and last. If the whole market is also near a low, traders give this more weight.
- A shakeout before a rise. The common story is that a large holder, building a position, pushes the price around to shake out nervous holders and buy their shares cheaply. Holders refuse to sell at low prices and buyers lack the confidence to step in, so volume dries up again. Medium-term traders often look for an entry here.
- On and off, just before a rise. Quiet days appear between small moves, rather than in one long stretch.
The first three roughly match three kinds of buyer: long-term holders in a weak market, long-term investors at the end of a fall, and medium-term traders after a shakeout. Recognising which stage you think you are in tells you whose game you are playing, and how long you should expect to wait.
In this topic
Three rules people use to act on ground volume, and why none of them tells you the bottom.
Intermediate · 3 min
When a rising share dips, how fast its volume shrinks is read as a sign of how the dip will end.
Intermediate · 2 min
Try this in the app
- Research — open a share and compare today's volume with its recent weeks
Share this lesson
Works with
- Key points and breakouts — Some prices matter more than the rest, and a share that clears one is telling you something.
- Waiting for confirmation — A price that pokes above a key point and falls straight back has told you the opposite of what it looked like.
- Trends — A share in a trend keeps making higher highs, or lower lows — and most of the time it is doing neither.
- When a tip is dressed up as analysis — A pitch that shows you arithmetic and charts can still be a sales pitch, and the arithmetic proves nothing.