Volume

Volume is the number of shares (or any other instrument) traded during a particular period. Volumes are normally shown on the lower part of the graphical representations in a bar chart format.

When volume is increasing it means that there is more interest in that particular instrument. There might be earnings which are coming out or a particular news and thus the stock is more active as people are trading more.
When volume is decreasing it means that there is less interest in that particular instrument. When volume is decreasing it might be the chase that something will happen in the price.

If the volume is very low it means that the market is dry (i.e. there are not many buyers and sellers). When this happens, there is a large spread between the buying price and the selling price of that instrument due to lack of liquidity. Spreads tighten when volumes increase and thus the difference between the buying price and selling price becomes narrower.

Analysing volume is very interesting and it shows us that volume needs to increase with the direction of the trend. Volume analysis is suitable as it provides extra confirmation that we are going to have a breakout on a particular resistance/support level.

This means that

1) In an uptrend, we expect that volumes increase (blue arrow) during upward movements and decline (red arrow) during downward movements:

2) In a downtrend, we expect that volumes increase (blue arrow) during downward movements and decline (red arrow) during upward movements.