Volume is a measure of supply and demand that is independent of priceVolume is usually light during the formation of the pattern and increases on a breakout from the pattern. For any pattern or trend line penetration, a breakout with increasing volume is more an indication that prices will continue in the direction of the breakout than a breakout on low volume.Rising volume levels when price is falling after a major peak gives supporting evidence that there is an underlying weakness in the security & warns that falling prices may continue.When price goes to a new high on increased volume, traders often compare volume with that which occurred during previous rallies in prices. If the current volume is less than the previous rally’s volume, there is a potential for a price trend reversal.
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1 comment:
Interesting post.thanks to sigma
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