What It Is
Volume measures the total number of shares, contracts, or coins traded in a given time period. It's the most fundamental confirmation tool in technical analysis — it tells you how much conviction is behind a price move.
Key insight: Price tells you what is happening. Volume tells you how meaningful it is. A breakout on heavy volume has far more significance than one on light volume. Volume is the fuel that drives price — without it, moves lack conviction and often fail.
In crypto markets, volume data comes from exchanges and can vary significantly between platforms. Focus on relative volume (compared to the asset's own average) rather than absolute numbers.
Trading Application
Make volume a required confirmation for every trade. Never trust a breakout without above-average volume. Never ignore a divergence between price and volume — it's usually the early warning of a failed move.
Use the 20-period volume moving average as a baseline. Volume above this average indicates above-normal interest. Volume spikes of 2-3× the average on breakouts suggest institutional participation.
This indicator works best when combined with price action analysis. Never trade indicators alone - always confirm with the chart.
Continue through technical indicators
Compare this reference with related structures and readings before applying it to a live chart.