$FIL ｜5-minute volume surged 10.1x｜Price barely moved
Before looking at position size, first understand volume surges.
At the minute level, spikes in trading volume tend to be noisy. A volume surge in one or two candlesticks may simply reflect a burst of concentrated trading; several consecutive high-volume candles are more informative.
Whether volume rises during a breakout is often considered one factor in judging whether the breakout is valid: breakouts on declining volume are more likely to fail.
Extreme readings often signal greater volatility. At such times, it’s better to reduce your position rather than add to it.
Before looking at position size, first understand volume surges.
At the minute level, spikes in trading volume tend to be noisy. A volume surge in one or two candlesticks may simply reflect a burst of concentrated trading; several consecutive high-volume candles are more informative.
Whether volume rises during a breakout is often considered one factor in judging whether the breakout is valid: breakouts on declining volume are more likely to fail.
Extreme readings often signal greater volatility. At such times, it’s better to reduce your position rather than add to it.