Technical Analysis Post 2# Volume.
What is volume? and how to read it?
Volume is purchase and sale contracts that are generated over a period of time. There can be selling volume and buying volume.
There are 3 types of volume: Low, medium and high volume.
As a trader we will seek to surf high volume, identifying orderblocks.
The volume will also give us information about the behavior of the market movements, so that we will be able to see when it is a good time to invest.
We will be able to identify the exact moment to invest, when the volume indicates a divergence or convergence of the price.
Volume divergence is when the price goes down or up but the volume does not follow. This indicates that the movement is running out of strength or interest in continuing with the movement. This will help us know when there will be a change in price trend.
Volume convergence is when the price goes down or up and the volume follows the price. This indicates that the movement has strength and can continue its trend.
In the image you have an example of how to mark and read the volume. In which we can observe two divergences and one convergence.
Thank you very much for reading the complete post.
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