Volume Analysis

Volume is the number of shares traded in a period. On its own it's just a count; the insight comes from comparing it to normal — usually an average volume line. High volume means many participants agree enough to transact; low volume means few care. The old adage: volume precedes price, and volume confirms it.

Volume is a confirmation tool laid over price:

• Breakout confirmation: a move through resistance on heavy volume is credible; on light volume it's suspect (a likely false breakout).
• Trend health: in a healthy uptrend, volume expands on up-days and fades on pullbacks.
• Climax / exhaustion: an enormous volume spike after a long move can mark capitulation or a blow-off — the last buyers or sellers rushing in.

Tools like on-balance volume and volume-weighted average price (VWAP) formalize this, but the eyeball comparison to average volume captures most of the value.

Price tells you what happened; volume tells you how much it mattered. A move on heavy volume reflects broad agreement and tends to stick; a move on thin volume can reverse easily. Ignoring volume is like judging a vote by the result while ignoring turnout. It's a core filter for separating real moves from noise.

Entry Point Trading weighs participation and confirmation like this inside its daily signal, then shows the reasoning behind each call.

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