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Chart Basics

Volume

Volume is the amount of an asset traded in a period — the conviction behind a price move.

Volume confirms a move
Breakout onhigh volume
Illustrative example — a schematic of how volume looks on a chart.

Volume measures how much was actually transacted during a candle. It is the fuel gauge of a move: a breakout on high volume reflects broad participation and is more trustworthy, while a move on thin volume is easier to fade and more likely to fail.

Volume is most useful as confirmation. A rally to a new high on rising volume is healthier than the same rally on shrinking volume, which can warn that the move is running out of buyers.

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