How to Read Volume on a Stock Chart

Start with the information that appears across the top of the chart. The first items are the date the chart refers to along with the name and ticker symbol of the stock. Next, you'll find price information, giving the day's high, low and closing figures for the stock. Along with this, you'll read the volume on a stock chart. This is the daily volume of shares traded. There's usually one more piece of information listed, called the moving average. This is indicated by the letters MA followed by a number in parentheses and a price. This is the average price the stock traded over the number of days indicated by the number in parentheses.
Look at the rest of the stock chart. You will see two graphs, one in the middle of the page and a bar graph across the bottom. The one in the middle will consist of a line graph with the line bracketed by a bar (also called a candlestick) for each day the chart covers. This is really three graphs in one. Those bars don't refer to the day's volume but to the price range for the stock each day. The top of each bar or candlestick shows the daily high, and the bottom shows the low. The line graph itself shows the closing price.
Examine the bar graph at the very bottom of the page. This graph records the volume of shares traded for each day the chart covers. The height of the bar indicates the number of shares traded. Use the scale (usually located on the far left) to determine how many shares the height of each bar represents.
Learn how to read volume on stock charts in the context of the other information you see on the chart. Changes in the volume of trading can be very informative. For example, if you see an increasing number of shares being traded and the stock is in an upward trend, it indicates that investors are bidding up the stock price. An experienced trader will watch for a drop in that volume that may signal the upward climb in prices is reaching its peak.

How to Read Stock Charts for Beginners (5 Steps)

Locate the stock symbol at the top of stock chart. The chart will also contain information about the stock's highs and lows (depicted by vertical bars), the volume traded (shown by a bar graph at the bottom of the chart), and the closing price in plain English.
Find the trend direction by looking at a 20-day and 50-day moving average (MA). Moving averages are generally located below the stock symbol on a chart. For example, an MA might be (20) 45.30. That means the moving 20-day average is 45.30 for the last 20 days. A general rule of thumb is that if the 20-day MA is above the 50-day, then the stock is trending up; if the 20-day MA is below the 50-day, the stock is trending down. You can also spot an upward trend by noticing a graph tending toward the top right corner of the graph; a downward trending stock will start creeping toward the bottom right.
Identify the price support. A price support is a low point in trading that the stock never falls below. On a graph, the stock might go up and down haphazardly; you want to find the point on the graph that's the lowest.
Identify the price resistance. In general, price resistance is the point on the graph where the price 'tops out.' In other words, the maximum value on the graph. Price resistance is the opposite of price support.
Repeat the above steps for as many stocks as possible over a few weeks. You'll begin to notice trends, and will be more able to identify price support and resistance over a period of time. You'll also be able to see when the price resistance breaks through; when this happens, it can make for a flurry of trading, as it usually means something exciting has been announced in that particular company.