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@msg2gramesh @TraDr81 @Ankush11787949 Many People have doubts of down move and associated volume. Hence a little clarification. We can never read volume on a standalone basis. It has to be read along with the price action. 1/n
Most importantly, volume and price action have to be read in relation with the location of the bar in the trend. Let us look into some cases for more clarity. When there is a pull back, we say that down move on low volume is good. 2/n
A pull back is normally profit taking and in mature trends it could be some distribution as well. Profit taking is done without creating any panic and the generally we see average spreads and less volume.
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However, if the spreads are wide and the volume is low then it could be bad because the sellers are pushing the price down and there is no demand to support. If you notice that the start of any reversal will be mostly on low volume and increasing spread. 4/n
As the down trend gathers momentum the volume increases. As the panic sets in the retail guys are rushing to sell and the volumes increase. Soon the volume becomes huge. 5/n
It is almost like an avalanche. The start is with small amount and as the avalanche moves down it gathers mass and becomes huge. Most big down trends would end when the volume becomes huge. 6/n
Actually, lot of buying will happen in the high volumes as the smart money accumulates from the panicked retailers. Just have a look at the big down move of March 2020, the move ended with huge volumes. 7/n
Similarly, at the start of a up trend High volume is good as the prices are marked up. As the retail guys are start coming in you will see up moves on low volume. This is good as there more and more people jump in and there is ease of upward move and no supply is present. 8/n
As the trend matures high volume is viewed with suspicion as the smart money is passing the stock to the people who do not want to be left behind and are rushing in. Normally the Uptrend end with a climatic move on ultra-high volume. 9/n
So, reading the volume is not as easy as what we all learn from the conventional TA concepts like price up and volume up is bullish and Price down and Volume up Bearish etc etc. 10/10
