🐋 $SOXLB 5-minute trading volume was about $3.57 million, 16.5 times the previous average; the price was nearly flat over the same period.
When volume spikes, many people’s first reaction is that big money has arrived, but it’s not that simple.
When assessing a volume spike, look at price as well: where the price stalls and how long the wicks are usually tell you more than the trading volume alone.
A rise on higher volume is often interpreted as having buying support, while a drop on higher volume is often seen as heavier selling pressure, but these are just rules of thumb.
The same readings can mean very different things in different market conditions, so don’t blindly apply any single rule of thumb.
When volume spikes, many people’s first reaction is that big money has arrived, but it’s not that simple.
When assessing a volume spike, look at price as well: where the price stalls and how long the wicks are usually tell you more than the trading volume alone.
A rise on higher volume is often interpreted as having buying support, while a drop on higher volume is often seen as heavier selling pressure, but these are just rules of thumb.
The same readings can mean very different things in different market conditions, so don’t blindly apply any single rule of thumb.