As mentioned by a few posters above, price moves as a function of the balance of volume. There is a lot of research showing that price and volume are cointegrated. Higher prices tend to see volume increase, while falling prices tend to see a decrease in volume. So a big move in price without much volume is usually considered as weaker than a move in price with an increase in volume. Frankly, it’s not a great trading or timing indicator, but it is useful as an additional signal and bit of information you use in your analysis.
I never been able to use volume as an leading indicator for trend, but ...these are my opinions. Volume is an indicator used to make comparisons, but not with trend, I have found it is better near turning points, but of course you will have to spend time digesting, reviewing charts to better understand what is considered turning point in high/lows, and these areas usually in uptrend be pullbacks within a trend. Without volume price stalls, as volume reduces, interest in that instrument alters. Volume often not to be used when huge gaps occur. Not every signal is a winner, so always have answers of what to do when price went wrong way.
Volume just shows how many people are buying and selling. Price can move without much volume too. Price moves because of imbalance of demand and supply. If there is more demand than supply it moves up. There can also be large volume without much movement as there is a balance in supply and demand. Just that they are more buyers and sellers trading.
Actually that top had increasing, not decreasing volume - until last 2 days. Spikes are often meaningless, and not a good point to draw tl's off of.
Interesting idea re no volume on chart, thanks, I'll try that. I'm 100% price action focused, that'll help me see 1minute candles better.
Seriously Ken, someone who says they take volume off and puts other indicators on has no clue. But keep in mind, you play the inverses so what you need to look for (for instance with UXVY) is low volume to signal a lull in selling intraday to enter a new long.
Right....since I use 5 monitors I'll use both. I'm doing a lot more daytrading stocks like CCL and less inverses except on red days. Main indicator is time &sales, which shows high volume block trades
Trust me, volume adds nothing but clutter to your charts. You can see for yourself. Put one chart on with volume and put the same chart on without volume and see how well the volume showing in one chart predicts the trend and/or the strength of it. You will see it makes no difference and sometimes it will even be misleading because there are a variety of reasons for a change in volume. And think of it this way, there are instruments that have no volume. People still make money trading them. What then? That means volume is not needed. It's a nice-to-have piece of information there but it cannot be relied upon for making trading decisions, imo.
Many thanks, I'm trading much better and profitably today without using volume, because I can see the one minute candles much more clearly since they are expanded. Much appreciated, wish I'd thought of that years ago.