Volume

How Volume is calculated

Volume is a direct count of how much traded during each period, plotted as a bar. There is no formula or lookback. Traders compare each bar to recent average volume to judge whether activity is unusually high or low.

How Volume is used

• →Confirm breakouts with rising volume, since moves on heavy volume are more trustworthy.
• →Be cautious of breakouts on weak volume, which often fail.
• →Watch for a volume spike at a turning point, which can mark capitulation or a blow-off.
• →Use volume to gauge whether a trend has real participation or is drifting on thin trade.

Common mistakes

• ✕Trusting a breakout that happens on clearly below-average volume.
• ✕Comparing raw volume across instruments instead of against an instrument's own average.