Volume basics

Volume is one of the most misunderstood concepts in all of trading.

• The most volume typically comes at the top and the bottom of a chart, or at the start and the end of a trend.

• Lack of volume is not necessarily a bad thing because a trend that is already moving does not need additional volume to continue in that direction.

• That being said, watch the volume on the red versus green candles. If the price is in an uptrend but the red candles have more volume than the green candles that is a warning sign. Always watch for contra trend volume.

I took my volumetric analysis more seriously when I identified this pattern in BTC back in Nov 2022. You can see even ETF approval couldn’t bring that much volume again in BTC.