I often hear/read technical analysts looking at volume and price action on a chart and claiming that there are "more buyers than sellers" or vice versa.
Since every trade requires a buyer and a seller, how can volume/price signify more of one than the other? What does that actually mean?
When I hear that there are "more buyers," I get the impression they actually mean more "professional" or "institutional" buyers, but I could just be imagining that meaning.
But wouldn't this "more buyers" situation actually represent a smaller number of large buyers placing multiple orders? (and those orders would be matched by a larger number of smaller investors on the other side of the trade?) Maybe I have my assumptions backwards and "more buyers" is what they say when they actually mean "more retail buyers and less institutional buyers"?
Or maybe the expression has nothing to do with number of buyers/sellers at all and is just some arbitrary technical analysis situation? What situation is it that they're trying to describe?
If the "smart money" traders had placed larger orders, then there would have to be equally large sellers on the other side of that large trade, right? I know trades often get broken up, but if the trades had been broken up it would be equivalent to "large traders placing multiple orders" scenario described above. If the trades were not broken up, then there would not be an imbalance in the "number" of "smart" vs. retail buyers/sellers, right?
UPDATE/EDIT: I usually see this stated in reference to technical indicators such as RSI. I don't typically hear people saying "there are more buyers than sellers" in the situations you guys are describing with more unfilled orders on one side of the (potential) trade (though that would make more sense if that was what they were talking about).
See for example: http://www.wisestockbuyer.com/relative-strength-index/