Discover our technical indicator strategies to optimize your trades
Volume represents the number of assets traded during a given period. High volume confirms the strength of a price movement.
Crucial indicator to validate breakouts, identify reversals and confirm trends.
High volume + Resistance breakout = Confirmed breakout
High volume + Support break = Confirmed bearish breakout
Extreme volume = Probable exhaustion, watch for reversal
Volume > Average: Strong interest, confirmed move
Volume < Average: Low interest, suspicious move
Average volume over 20 periods - Reference
Buy Signal : Price breaks resistance + Volume > 2x average
Sell Signal : Price breaks support + Volume > 2x average
Volume validates breakouts. Without high volume, it's probably a false breakout! Golden rule of trading.
Climax Volume : Extreme volume > 3-5x average = Exhaustion
Reversal : After climax, wait for price reversal
Extreme volume = Everyone has entered. No more fuel to push price. Reversal imminent!
Uptrend : Volume ↑ on rise + Volume ↓ on fall
Downtrend : Volume ↑ on fall + Volume ↓ on rise
Analyze which candle has the volume: Volume on green candle = Buyers. Volume on red candle = Sellers.
Price rises but volume falls = Bearish divergence, trend weakening. Price falls but volume falls = Low selling pressure, bounce possible. Volume MUST confirm price!
Accumulation: Ranging price + High volume = Pros buying. Distribution: High ranging price + High volume = Pros selling. Watch where volume concentrates!
Don't compare 1M Bitcoin volume with 100K altcoin! Use RELATIVE volume: Current volume / Average volume. > 1.5 = Strong. > 2.5 = Very strong. > 5 = Climax!
Daily volume spike more important than 5min. Weekly volume more important than daily. Big timeframe volume = big money moving!
This is mistake #1! Breakout without volume = FALSE breakout 80% of the time. Price will return to range. ALWAYS wait for volume!
Volume is lower on weekends and at night. Price movement with low volume = unreliable. Wait for high liquidity hours (London + NY open).
High volume ≠ Price rising. Volume = Interest. Check if volume accompanies buyers (green candles) or sellers (red candles)!
If OBV rises but price stagnates = Hidden accumulation. If OBV falls but price stagnates = Hidden distribution. The indicator that sees the invisible!
Series of growing volume spikes + Price slowing = Exhaustion. Last giant spike = Climax. Prepare for immediate reversal!
Price breaks support with LOW volume then quickly rises back = Successful test! Big players test if sellers remain. Strong buy signal!
Break resistance + Volume > 2x + Close above = Perfect trade! Probability >75%. This is THE king setup.
RSI divergence + Volume climax = 90% GUARANTEED reversal. The moment when everything aligns. Don't miss this setup!
MACD golden cross + Growing volume = Strong bullish trend start. MACD death cross + Growing volume = Violent bear market start.
