What can trading volume tell me about a stock?

I have discovered that if I do wish to one day start actually investing in a stock, that I should not invest in a stock that has a low daily volume. Volume refers to the number of shares of a stock traded during a given time period. Many websites have quoted a low daily volume as 15,000 shares or less. Often on these websites the notion of volume is discussed in passing but on closer examination I discovered that volume plays some part in the price a stock will be sold or bought for.

Just as with any product, an intricate system in relation to supply and demand is at work. If there are few stocks being sold each day then of course the price that can be requested per stock when sold is heavily controlled. One website I surfed even warned "Low Volume = Stay Away." Again, let me emphasize it's a basic supply and demand phenomenon. If there is a low interest in the stock, then there will be a lower volume traded and if there is a higher interest in the stock then a higher volume will be traded.

In addition several websites stated that some people mistakenly think that if the stock volume is very high there are more buyers than sellers for that particular given time period or vice verse. This seems very strange to me that people could mistakenly believe this because without someone to buy something who could you sell it to and without someone to sell something to you how could you buy it? So if you get yourself involved in a low volume stock then you may be stuck with it. It would be difficult for you to get out of this stock since you would need to find someone that is interested enough to buy it. That means if I purchased such a stock it could just be more like an investment that yielded no gains because my money would be put into a stock but never to be able to be touched.

So is it helpful for me to look at volume? Volume can be helpful first to see if there is enough interest in a stock, that can easily be deemed from the information I have already discussed above. But is there more to it than just that? Just select a high interest stock?

This seems like the first step as far as selecting a stock to invest in goes but to actually do some deeper analysis of the stock, you will need to pay attention to some trends or changes that take place involving the volume of a stock. Watching stock volumes and adhering to some "rules of thumb" will help you make some good decisions about stocks.

• When you see an increase in stock volume and as a result prices are being pushed higher or lower, we can assume that a trend has started. This trend will most likely continue. You can assume this if it's a new trend, if it's an old trend then there could be a dramatic change without warning.
  
• If there is an existing trend that has already been established but then there is a sudden volume spike, this could indicate that the trend is over and is likely to change.
• Within a trend that has decreased volume pushing the prices higher or lower, then that trend is most likely to end.
  

Maybe it's not even as easy as that. I am learning but very slowly. I think the next thing I need to do before going any further is to really try to understand stock charts. So far I have learned about Volume and RSI. I know by looking at these two indicators I can learn a lot about a stock. Maybe I will also explore some other indicators as a way to further my knowledge. I am reading a little bit about sophisticated computer software but some people warn that even the software is not as smart as an experienced pro and it's still best to go with gut instinct.

Anyway, I have decided to start to track the progress of several stocks and see what happens to them over the course of a few weeks or months even. Already I have learned a lot. From looking at Volume of a stock I can determine if it's a worthy and non-risky investment. The RSI can also give me insights into whether a stock is being over or under sold as well.