Volume is the most overlooked piece of information on a chart. Price tells you what happened; volume tells you how much conviction was behind it. Reading the two together is a real edge.
What volume is
Volume is the number of shares or contracts traded in a period. A tall volume bar means lots of participation; a short one means little. It's a measure of activity and conviction, not direction.
How traders read it
- Breakouts — a breakout on high volume is more convincing than one on thin volume, which often fails (a trap).
- Trends — healthy trends tend to see volume expand in the trend direction and shrink on pullbacks.
- Climax/exhaustion — a huge volume spike after a long move can mark capitulation or a blow-off top.
- Confirmation — rising price on falling volume is a warning that the move lacks support.
A note for Forex traders
Spot Forex has no central exchange, so "volume" there is really tick volume (number of price changes), a useful proxy but not true traded volume. In stocks, crypto and futures, volume is real.
Using it well
Don't trade volume alone — use it to confirm what price and structure are telling you. A move backed by volume is one to trust more; a move on thin volume deserves skepticism.
Price is the headline. Volume is the conviction behind it — and conviction is what makes a move stick.
Education only — not financial advice.