In this THREAD I will explain "Price & Volume relationship"
1. Price UP, Volume UP
2. Price UP, Volume DOWN
3. Price DOWN, Volume UP
4. Price DOWN, Volume DOWN
5. Relationship between PRICE, VOLUME and OI
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1. Price UP, Volume UP
2. Price UP, Volume DOWN
3. Price DOWN, Volume UP
4. Price DOWN, Volume DOWN
5. Relationship between PRICE, VOLUME and OI
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1. Price UP, Volume UP:
Volume is important because it has such a significant impact on price from an absolute and relative perspective.
When the uptrend is breaking resistance levels, and backed by increasing volume, is normally a buy.
Volume is an indicator of momentum.
Volume is important because it has such a significant impact on price from an absolute and relative perspective.
When the uptrend is breaking resistance levels, and backed by increasing volume, is normally a buy.
Volume is an indicator of momentum.
2. Price UP, Volume DOWN:
Rising prices on declining volume can indicate declining momentum and potential reversal.
Falling prices on declining volume can equally signal a shift in direction.
As you can see in this example, MS changes to bearish shortly after.
Rising prices on declining volume can indicate declining momentum and potential reversal.
Falling prices on declining volume can equally signal a shift in direction.
As you can see in this example, MS changes to bearish shortly after.
3. Price DOWN, Volume UP:
In this PA, we can observe that the volume reaches, when the bearish MS starts to appear.
After the huge bearish volume, we can identify a series of LH and LL.
If the price is going down, and the bearish volume increases, SELL or SHORT.
In this PA, we can observe that the volume reaches, when the bearish MS starts to appear.
After the huge bearish volume, we can identify a series of LH and LL.
If the price is going down, and the bearish volume increases, SELL or SHORT.
4. Price DOWN, Volume DOWN:
When volume is low and price is decreasing, this indicates a bearish trend.
But, if the volume is decreasing while parallely price is doing it too, look to exit your short position, if the downtrend is not supported by volume.
When volume is low and price is decreasing, this indicates a bearish trend.
But, if the volume is decreasing while parallely price is doing it too, look to exit your short position, if the downtrend is not supported by volume.
5. Relationship between PRICE, Volume and Open INTEREST:
This is used basically on STOCKS, but this can also be used in crypto, since are basics of price action.
In this CHEAT SHEET are all the examples that we have seen, PLUS "OPEN INTEREST"
Study it.
This is used basically on STOCKS, but this can also be used in crypto, since are basics of price action.
In this CHEAT SHEET are all the examples that we have seen, PLUS "OPEN INTEREST"
Study it.
I hope this THREAD has helped you to understand more about VOLUME and PRICE Relationship.
If I see interest in this THREAD, I will do one explaining trading examples of VOLUME + PRICE
RT and FAV to spread this THREAD is appreciated.
If I see interest in this THREAD, I will do one explaining trading examples of VOLUME + PRICE
RT and FAV to spread this THREAD is appreciated.
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