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By Adam Milton, About.com Guide to Day Trading

Buying Volume, Selling Volume, or Both

Wednesday July 16, 2008

Every trade requires both a buyer and a seller to trade the same contract at the same price in order for the trade to occur. This means that there is a trader buying a contract (or number of shares, or forex lot), and a trader selling the same contract, at the same time. If the same contract is being both bought and sold at the same time, how can a trade be classified as either buying volume or selling volume?

The answer is related to whether the trade occurs at the bid price or the ask price, because this determines how the trade will affect the current market price. A full explanation of how total volume is divided into buying volume and selling volume is available in the buying and selling volume article.

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