How to Identify and Apply Volume in Trading
Volume is the number of shares, contracts, or lots traded in a given time period. It tells you how strong or weak a price move is. If price moves with high volume, it usually means the move is genuine. If the volume is low, the move may be fake or weak.
✅ How to Identify Volume Properly
🔹 Step 1: Use TradingView
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Go to tradingview.com
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Open any chart and add the "Volume" indicator (it's free)
🔹 Step 2: Understand Volume Bars
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Tall Green Bar = High buying volume
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Tall Red Bar = High selling volume
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Short Bars = Low activity, avoid trading
🔹 Step 3: Focus on Key Zones
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Check volume near Supply & Demand zones
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If price hits Demand with high volume, expect reversal or breakout
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If volume is low → price may reverse soon
📊 How to Apply Volume in Trades
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Entry Confirmation: Only enter a trade if there is a volume spike with a clear price reaction.
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Breakout Filter: A breakout with high volume = reliable.
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Fakeouts: Breakouts with low volume = fake breakout → avoid or take opposite trade.
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Volume Divergence: Price going up but volume going down = warning of reversal.