Volume Analysis For Confirmation
A 1-minute lesson from the MarketPro academy, one of 24 in trading strategies.
Volume measures how many units of an instrument changed hands over a given period. Many traders use it not as a standalone signal, but as a way to confirm or question the strength behind a price move shown on the chart.
Volume measures how many units of an instrument changed hands over a given period. Many traders use it not as a standalone signal, but as a way to confirm or question the strength behind a price move shown on the chart.
Common Ways Volume Is Read
- A price move accompanied by rising volume is often read as having stronger participation behind it
- A price move on unusually low volume is sometimes viewed with more skepticism, as it may not reflect broad conviction
- A breakout from a range accompanied by a volume spike is sometimes treated as more credible than one on quiet volume
- Volume that dries up during a prolonged trend can be watched as an early hint that momentum is fading
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Lesson 17 of 24 in Trading strategies
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