How to analyze trading volume - Cryptocurrency exchange platform

Trading volume is a very important factor in technical analysis.

When we talk about trends,

“Trend” refers to direction,

“Force” is driven by trading volume,

Without the cooperation of trading volume, it’s all small-scale skirmishes.

Trading is like war,

Only in large-scale battles will both sides invest a lot of manpower and material resources,

Otherwise, it might be a cover-up for real intentions to lure the enemy.

Therefore, any market trend without the cooperation of trading volume is not worth paying attention to.

Key points to focus on when analyzing trading volume:

1、

Top: If there is a volume expansion with stagnation or a volume decrease during a rally, beware of the suspicion of distribution.

2、

Mid-term consolidation pattern: If it is a volume contraction, it is normal,

If there is a volume increase, be cautious of a trend reversal.

3、

Important resistance levels: Be cautious if the price rises while volume decreases or if there is a volume expansion with stagnation.

4、

When breaking through key points, volume must increase.

5、

The trend of trading volume is also very important,

For example, a pulse-like volume increase at the bottom may be a sign of accumulation,

Gentle volume increases may also indicate accumulation,

Pay special attention to volume stacking as well.

6、

In the domestic market, a breakout requires volume expansion,

A decline may not necessarily require volume expansion.

7、

In futures trading, also pay attention to the relationship between open interest, price, and trading volume.

8、

Areas with dense trading volume are also important resistance zones.

9、

If there is a huge volume increase at a secondary high, it may also be suspicious of distribution.

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