Volume

Volume counts activity, not direction. A high-volume bar says many units traded while that range was forming. It does not say whether buyers or sellers "won" unless you also look at where the bar closed and, on a trade-by-trade feed, whether prints hit the ask or the bid. In cash equities the unit is shares. In futures it is contracts. In spot forex the usual feed is tick count, which is not share volume and should not be read as if it were.

Compare a bar with its own recent volume, not with another stock. A rising market on rising volume is the classic confirmation: more activity is showing up in the direction of the move. A rising market on shrinking volume is a warning that fewer participants are willing to pay up. The warning is not a sell signal. Climactic volume, a spike many times the average at the end of a long move, can mark exhaustion or the start of a new leg. The next bars decide which.

Use volume to grade a breakout. A close through resistance on volume well above the recent average is a stronger event than the same close on a holiday print. Use a volume dry-up inside a pullback as a hint that selling has quieted. Always pair the number with the close. Effort without result, heavy volume and a bar that closes where it opened, is its own information.

Assuming every high-volume down bar is distribution by institutions. You cannot see the account behind a print from the volume total. Also comparing raw volume across a split, a lot-size change, or a session that is half a day long.

End-of-day volume arrives too late to manage the open. Intraday volume is lumpy around the open and the close, so a "high" reading at 3:25 may be the ordinary closing auction. And volume has no price level in it. Ten thousand shares at the low and ten thousand at the high are the same volume number.