Volume: Weight Behind the Move
Price is direction. Volume is commitment.
When you pair them, fake moves stand out immediately.
Key Questions to Ask
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Is the move supported by increasing volume?
Breakouts with dwindling volume are suspect. -
Is volume diverging from price?
Higher highs on lower volume often hint at exhaustion. -
Where did volume cluster?
High-volume nodes mark areas of agreement; low-volume nodes are air pockets.
Simple Techniques
- Volume moving average to contextualize whether current participation is above or below average.
- Volume climax bars to spot blow-off or capitulation moments.
- Volume + candle spread to assess if effort matches result (Wyckoff logic).
Mistakes to Avoid
- Using absolute volume numbers without comparing to history.
- Forgetting that different exchanges and pairs have different baselines.
- Assuming every high-volume bar is bullish or bearish without checking the location.
Practice Ideas
- Annotate breakout attempts and note which ones had confirmatory volume.
- Revisit failed breakdowns and see if volume hinted at absorption.
- Combine volume with orderbook screenshots to internalize the relationship between passive and aggressive flow.
Volume is the closest proxy we have for “how serious participants were.”
Respect it, but never let it speak without price and context.