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Since every trade has a buyer and a seller, I don't understand when people say buyer volume is X or seller volume is Y (if seller volume is different from buyer volume). Where are these numbers coming from?

user70903
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1 Answers1

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Yes, every trade requires both a buyer and a seller.

Buying volume takes place at the ask price and it puts upward pressure on the security when it exceeds selling volume.

Selling volume takes place at the bid price and it puts downward pressure on the security when it exceeds buying volume.

It's the net aggregate volume on one side that moves price in that direction.

Bob Baerker
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  • Does this count only market orders? If I put in a limit order to buy, I'm effectively trying to buy at the (my own) bid. –  May 01 '20 at 20:14
  • @Michael - If you place a limit order to buy at your price, you're not causing a trade to occur. You're order is just going on the order book, hoping for a counter party to show up. If you become best bid, a counter party willing to transact at your price (the market) causes the trade. – Bob Baerker May 01 '20 at 20:33
  • Yes but at that point when I become best bid which is then hit, I have just bought at the bid, not the ask. –  May 02 '20 at 07:03
  • OK, you bought at the bid. That's because you placed a limit order and you waited until a counter party showed up, willing to take the other side of the trade at your price via a market order. What does you getting a better price that have to do with the OP's question? – Bob Baerker May 02 '20 at 15:16
  • I'm asking if in that case, where I bought at the bid, is that counted as buy volume or sell volume? It seems like you saying it's considered selling volume since it took place at the (my) bid. –  May 02 '20 at 20:56
  • Buy volume is used interchangeably with ask volume. Sell volume is used interchangeably with bid volume. Google for further explanation. – Bob Baerker May 02 '20 at 22:18
  • Does first order take precedence? For instance, if I put in a limit to buy and you put in a limit to sell (assume nobody else is trading) at the same price such that I buy from you. –  May 03 '20 at 04:56
  • "Most securities markets operate on the basis of Price/Time priority. This means that orders are executed based on best price, and if multiple orders are at the same price, an order with an earlier time trades first. NYSE is the only U.S equity exchange that uses a unique “parity/priority” allocation model that is designed to promote deep liquidity, and superior market quality." – Bob Baerker May 03 '20 at 11:36