🐋 The trading volume over $ARIA 5 minutes was about $1.8 million, 9.2 times the previous average; prices fell 4.2% over the same period.
When trading volume surges, many people instinctively assume big money is coming in, but it’s not that simple.
Volume spikes over short periods are often incidental. A surge on one or two candlesticks may simply reflect a single concentrated trade; several consecutive high-volume candles would be more convincing.
Whether volume rises during a breakout is often used as one way to distinguish a genuine breakout from a false one: a breakout on declining volume is more likely to fail.
Don’t change your original plan because of a single indicator, and certainly don’t gamble borrowed money on one reading.
When trading volume surges, many people instinctively assume big money is coming in, but it’s not that simple.
Volume spikes over short periods are often incidental. A surge on one or two candlesticks may simply reflect a single concentrated trade; several consecutive high-volume candles would be more convincing.
Whether volume rises during a breakout is often used as one way to distinguish a genuine breakout from a false one: a breakout on declining volume is more likely to fail.
Don’t change your original plan because of a single indicator, and certainly don’t gamble borrowed money on one reading.