Participation vs price

Volume is the amount of trading that changed hands in a period. On a chart it usually appears as vertical bars beneath the price, each bar covering the same period as the candle above it. Price shows WHAT the market decided; volume shows HOW MANY participants stood behind that decision. Of two candles the same size, the one on high volume is a move endorsed by a crowd, while the one on low volume is a picture produced by few participants and easier to unwind. The traditional reading is that in a healthy trend volume expands on the legs in the trend's direction and contracts on the corrections, and comparing the bar under a breakout candle with the preceding bars is one of the most useful checks there is. The common misreading is to give volume a direction: high volume does not mean "buyers won" or "sellers won", because every trade has both sides. Direction comes from price; volume only measures the crowd behind it. Nor does fading volume say a trend will end — only that its support has thinned. For risk literacy, volume is a layer of evidence, never the thing that decides.

This content is educational information, not personalised investment advice. The chart examples are illustrative.

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