Advanced Volume Concepts

Trading volume plays an important role in identifying trends. Significant trends are accompanied by a high trading volume, while weak trends are accompanied by a low trading volume. When a coin goes down it is advisable to check the volume which accompanied the decline. A long-term trend of healthy growth is accompanied by a high volume of increases and a low volume of declines. It is also important to see that volume is rising over time. If the volume is decreasing during increases, the upward trend is likely to come to an end, and vice versa during a down trend.The greater the trading volume, the higher probability that an established TA pattern can be trusted by traders and investors, and profitably acted upon. If a TA set-up seems to be establishing itself on the trading chart, take a look to the trading volume. A consolidation pattern, resistance level, price dip, or otherwise may look perfect, but can only be acted upon if it formed with significant trading volume, such as 25% of total outstanding coins being traded, rather than only one of two percent.

Is volume important in trading? What is volume? Volume is how much of the coin you’re looking at is being traded in the time frame that you select. Most exchanges will show you the volume of the last 24 hours. This is important to know in order to know if you can buy and sell that market easily. It’s all about liquidity if you want to day-trade, now for swing trading it’s a little different due to the fact you are in the market for a longer amount of time.Is volume important for you?This totally depends on the volume you day trade with. Why I say this is because if you trade bigger you need a bigger volume in order to get in and get out. For example if you trade with 1 Bitcoin then I would like to see a volume of about 500 Bitcoin in the 24 hours or higher, now if you trade 5 bitcoin then you want to see more than that 500 Bitcoin volume. The higher the volume the easier it is to get in and get out.

There are exceptions. Don’t only look at the 24 hour volume also look at the volume that is on average on the hourly in order to see if the volume only came in for a so called “Pump & Dump” basically a group of people pumped a coin up (they bought in low and pushed it up a bit and the masses followed up in order for it to rise)Why is volume not as important for Day Trading as it is for Swing Trading. This is because Day Trading is all about going into a coin and a few hours later to go back out with some profit. now for Swing Trading you would be in a coin for a longer time so you need less volume in order to get in and get out, but make sure it still has a healthy volume. Why I say this is because you still want the coin to go up in a few days time right, if there is hardly any volume that often means that the coin doesn’t move all that much except for by pumps from people.

The volume that is in a coin is important based on the amount you want to trade with and the trading style you want to use. Remember don’t trade too big if the volume of the coin is not high.


Along with circulating supply and market capitalization, volume is one of the most prominent metrics in crypto. Let’s breakdown what volume is, and how it can show us a coin’s direction.The volume of a token listed on CoinMarketCap is quite simple. It’s the amount of the coin that has been traded in the last 24 hours. For example, roughly $3.5 billion worth of Bitcoin has changed hands in the last day. You can break this down in a variety of ways; you could also list it as 3,039,787,668 Euros. Or, in crypto terms, 642,566 Bitcoins. You can also slice and dice it by exchange. In the last 24 hours, roughly 14.97% of all Bitcoin traded moved through Bitfinex, where the price is $5514 as of writing. Essentially, volume underscores how many people are buying and selling the coin. If the price of Bitcoin goes up and it shows a hefty volume, that tells us lots of people are making moves. Thus, it will likely keep going up. If the price of Bitcoin drops, but there’s minimal volume, that could tell us only a small amount of people back the trend. Let’s go into more detail on the ramifications.Volume is arguably the most important metric for a cryptocurrency, because of the amount of ways it can be broken down. From volume, you can infer the direction and movements of a coin. It’s an essential metric for traders. Volume can examined in minute detail. You can track volume on CoinMarketCap by the last 24 hours, last week, or last 30 days. This helps reveal if a coin’s recent swings are an aberration or the norm. A coin with frequent heavy movements won’t attract attention if it doesnt come with high volume. If a coin normally has less volume, heavy trading in the last 24 hours could indicate there’s some support behind the move it may be making.You can also examine which exchanges had what volume. This matters because exchanges frequently have different prices. As well, many exchanges are geographically-focused. Kraken, for instance, is largely a European exchange. OKCoin functioned in China until the People’s Bank of China cracked down recently. Volume by exchange can reveal where the buyers or sellers of a coin are. CoinMarketCap does not, however, reflect exchanges with no fees. Exchanges that don’t charge a fee allow traders and bots to send coins back and forth for free, imitating a high volume.

Generally, the biggest and most popular coins are traded the most. If you sort by volume on CoinMarketCap, the top three coins are Bitcoin, Etherum, and Ripple, also the three largest market caps. No surprises there. But if you slide down a bit, you’ll see MonaCoin, a lesser-known currency, having higher trading volume than big names like Neo and Dash. MonaCoin isn’t much talked about, but it’s seen a remarkable 86.97% change in the last 24 hours. Coupled with a high trading volume, that’ll attract plenty of attention.Comparatively, if we sort by lowest 24 hour trading volume in the top 100, Dentacoin pops up. It’s seen a 26.25% increase in the last 24 hours. That looks great on paper. But the low volume could make investors cautious. It might mean that the move won’t last, and that Dentacoin could soon see a correction. Of course, there’s no way to know for certain. Comparing the 1 day volume to the 7 day volume is another way we can read trends. Around $3.6 billion of Bitcoin was traded in the last 24 hours. Around $12.3 billion Bitcoin moved total in the last seven days. Almost a quarter of Bitcoin’s 7 day volume occurred yesterday. This tells us that yesterday was a massive trading day, which isn’t likely to repeat. On the other hand, you truly never know in crypto.
Cryptocurrencies are so different from established securities that there’s limited usefulness in comparing metrics. Since tokens don’t produce financial statements, they have relatively few metrics to start with. But we’ll compare cryptocurrency trading volumes to provide a sense of scale. In the last 24 hours, around $3.6 billion of Bitcoin was traded, as the price hit all-time highs. Comparatively, around $1.3 billion of Ethereum was traded. There’s quite a drop-off from there to Ripple, which saw $410 million change hands. But cryptocurrencies are already vastly more traded than conventional stocks. Apple trades roughly $4 billion a day in volume. For now, that remains ahead of the largest cryptocurrencies, but Bitcoin’s volume is knocking on the door. The higher trading volume of cryptocurrencies is one reason they fluctuate so drastically.For traders, volume hints at sustainability of a given move. A drastic price increase with low volume might be fool’s gold. A drop with considerable volume behind it might mean a coin is in for an extended bear run. There are no certainties in cryptocurrency. But effectively assessing volume is an important tool in an investor’s belt.

Volume analysis is the technique of assessing the health of a trend, based on volume activity. Volume is one of the oldest day trading indicators in the market. I would dare to say the volume indicator is the most popular indicator used by market technicians as well. Trading platforms may not have a particular indicator; however, I have yet to find a platform that does not have volume.The volume indicator is one of the simplest methods for observing the buying and selling activity of a coin at key levels. The tricky part is volume can provide conflicting messages for the same setup. Your ability to assess what the volume is telling you in conjunction with price action can be a deciding factor for your ability to turn a profit in the market.We will cover how to assess the volume indicator to help us determine the market’s intentions across four common setups:-Breakouts-Trending Coins-Price Reversals/Volume Spikes-False BreakoutsTraders will often look for breaks of support and resistance to enter positions. There are two key components to confirm a breakout: (1) price and (2) volume. When stocks break critical levels without volume, you should consider the breakout suspect and prime for a reversal off the highs/lows.

Although we dont take trades based on just ONE candle breaking a pattern…analyzing the volume on a break of one our our potential setups will only help build more confidence in you placing the trade. As we get closer to pulling the trigger as our qualifiers are being bet..we are adding HIGHER PROBABILITY and CONFIDENCE on our side.When there are strong support and resistance levels, volume can help confirm a breakout. If the price has struggled to get above a certain price it is going to take conviction on the part of the buyers to push it through that level. Conviction is shown via volume.A break above resistance, or below support, on larger than average volume shows conviction and the breakout is more likely to be legitimate.A break above resistance, or below support, on low volume shows little conviction; the breakout is more likely to fail.A common problem is buying an upside breakout, or selling a downside breakout, when volume doesn’t confirm it.

Trending Coins and Volume

When a coin is moving higher in a stair-step approach, you will want to see volume increase on each successive high and decrease on each pullback. The underlying message is that there is more positive volume as the coin is moving higher, thus confirming the health of the trend.This sort of confirmation in the volume activity is usually a result of a coin in an impulsive phase of a trend.As the coin moves in your favor, you should continuously monitor the volume activity to see if the move is in jeopardy of reversing. The speed of this setup is much slower versus the other strategies. However, the difficulty reveals itself in the increased number of false moves, which are commonplace later in the day as volume falls off.

Remember Volume is in addition to What we are already seeing in the should only confirm a true break out or keep us in a trade if we see volume increasing.Just as conversely IF volume is falling off as price goes higher..BE AWARE AND WATCH FOR THE TURN COMING UP. GREAT EXAMPLE OF OL’ MIGHTY BTC…(I put this warning out there on discord for our traders back in mid-December as BTC was coming up on 20K).


-When volume spikes to an extreme, relative to typical volume, it indicates that buyers or sellers may be exhausted.
-When the volume spike occurs after a run higher in price, it indicates buyers could soon be exhausted, and with no buyers left to push the price up, the price will drop.
-When the volume spike occurs after a run lower in price, it indicates sellers could soon be exhausted, and with no sellers left to push the price down, the price will rise.
-Volume only provides insight, not trade signals. Price ultimately needs to confirm what volume is saying.


-Volume and price are the purest indicators, yet because of this there can also be a lot of “noise.” Indicators help smooth out the data, make it more visually appealing, and may help you spot important changes in volume or price not easily seen on a basic chart.There are a large number of volume based indicators, although many of them function in similar ways.A good exercise is to go through your charts on your coins and look at these price and volume spikes and watch how the volume and price action behave around these inflection points so you can recognize it earlier when you see it coming in the future.

An important part of volume analysis is understanding when and where volume is important in the structure of the asset you are trading.You probably wonder why an asset will move more at different times of the day than the other. Well that has to do with the volume of coins/ tokens being traded at that particular time of day.When most major markets exchanges are offline (non working hours), then the market is said to be trading THIN, that means there is not a lot of institutional money in the market. So it will take less volume to move it up or down in price. Since all the market is , is an AUCTION taking place between buyers and sellers, think about how many buyers and sellers there are with bigger orders when there are bigger players in the auction process. During times when the market is trading thin, a trader with an order or succession of relatively big orders can move the market more than he could have during peak volume times. There are less bigger orders standing in their way as they work their way up the order book. This is why you will sometimes see the market trade higher or lower than normal during the weekend without any real volume.

TI takes a look at volume and shows us some in-depth examples of how to identify some of the things you just read about as well as what to look for when using volume in crypto: