Volume trend refers to the direction and changes in the trading volume of a stock or other asset over time. It tracks whether the volume of trades is increasing, decreasing, or remaining stable during a certain period. This indicator helps traders understand the strength of a price movement — for example, a rising price accompanied by increasing volume suggests a strong and sustainable trend, while a rising price with decreasing volume may indicate a weak trend and a potential reversal. Thus, the volume trend is an important tool for confirming trends and trading signals.
Why the Volume trend?
In our strategy, we enter a position during an uptrend. If trading volume is also increasing, it confirms the strength and sustainability of the trend, which is a clear buy signal for us. On the other hand, if the trend is rising but the trading volume is declining, it may indicate weakening and a potential trend reversal. In our strategy, we consider this a warning signal and avoid entering trades in such situations.
Answers and Score
| ANSWER | SCORE | PRIORITY |
| Trading volume is increasing | 10 | 1,1 |
| Trading volume is decreasing | 4 | 1,1 |
| A significant increase in volume | 9 | 1,1 |
| A significant drop in volume | 3 | 1,1 |
| The volume is constant | 5 | 1,1 |
Where to find the Volume trend?
You can find a pullback in these charts. For example, on finviz.com or finance.yahoo.com
This question is part of this analyzer.
| Decameron Stock Analyzer – Swing trading, v.1.0 | open analyzer |
Do you want to know more?
What Impact Does Volume Have on Stock Movement and Why Include It in Your Analysis?
