The role of volume

Volume is the number of shares or contracts traded in a period. It is the fuel behind price — and a vital sanity check on every move.

What volume tells you

• Volume confirms conviction. A breakout on heavy volume reflects broad participation and is more likely to hold. The same breakout on thin volume is suspect.
• Volume should expand in the trend direction. In a healthy uptrend, up days carry more volume than down days. The reverse warns of weakening.
• Climax volume marks exhaustion. A huge volume spike after a long move often signals the last buyers (or sellers) piling in just before a reversal.

How to read it

Volume sits as bars under the price chart. Compare each bar to the recent average rather than reading it in isolation. A spike means something; a single average bar rarely does.

The limitations

• Forex has no central volume. Because FX is decentralised (over-the-counter), broker "volume" is only tick volume — the count of price changes, a proxy, not true traded size.
• Volume confirms, it does not predict. It tells you how much agreement is behind the move you already see; it cannot tell you the next move on its own. Use it alongside price, never instead of it.