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1.4 - Volume analysis, Wyckoff techniques & On-balance Volume

Volume

Dow theory stastes volume must confirm the price

  • The theory states that if volume is increasing along with the price trend, it suggests the trend is valid, if volume doesn't confirm the move it may suggest the move is a fakeout
  • If there is high volume at support and resistance levels, it means the level will be quite strong

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Wyckoff theory suggests suggests a big move should converge with big volume (effort = result)


Volume convergence (big effort turned into big result)

 

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Fake out (big effort but no result)

 

 

 

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OBV

 

 

 

 

 

 

 

 

 

 

 

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