Price tells you where the market went. Volume tells you whether to believe it. A price move without volume support is a whisper. A price move with strong volume is a shout. Volume is a leading indicator that helps you identify who is in control — buyers or sellers — and whether that control is strengthening or weakening.
Volume = number of units/contracts traded in an asset during a given time period
Stocks = shares; crypto = tokens/coins; derivatives = contracts — volume is recorded for every transaction
Volume confirms breakouts, breakdowns, S/R levels, and candlestick formations
Volume is another point of confluence — adds confirmation to your existing bias
Decreasing volume inside a consolidation = healthy coiling before the move
Spike in volume on the break = confirmation of direction — this is what you are waiting for
Lesson
The Four Volume Scenarios — Who Is in Control?
There are only four combinations of price direction and volume direction. Each one tells a specific story about the health of a move and whether it is likely to continue or reverse. Memorise these four scenarios — they are the foundation of all volume analysis.
Price Rising + Volume Rising: ✅ Strong buying — buyers are in full control; trend continuation expected
Look for big volume spikes at S/R flips, breakouts, and breakdowns — that is institutional money moving
Combine volume analysis with S/R levels AND candlestick formations for highest probability setups
Volume works on ALL timeframes — from 5-minute scalp charts to weekly position trade charts
Check Yourself
Price has been rising for 6 consecutive sessions. However, each successive up-candle shows lower volume than the previous, with the final candle printing a tiny body on almost no volume at all. What does this volume pattern signal about the move?
Liquidity Theory · Learn · Analyze · Trade together Educational content only — trading involves substantial risk and most beginners lose money. Nothing here is financial advice.