In the trading market, many people are keen on studying various complex candlestick formulas and niche technical indicators, but often overlook the most fundamental, genuine, and always reliable core indicator—trading volume. It is the foundation of all technical analysis and the key to understanding market sentiment and judging the authenticity of market trends. Every mature trader always first grasps trading volume.

Simply put, trading volume is the total quantity of market funds traded over a period of time. In daily trading, it reflects the tangible evidence of the tug-of-war between buyers and sellers. Price is the "appearance" of the market, while trading volume is the "confidence" behind the market. Price fluctuations can be driven by short-term funds manipulating perceptions, but the size and reality of trading volume cannot hide the market's most genuine attitude, which is also why it can become a classic core indicator.

New traders often make the mistake of only looking at price fluctuations, ignoring trading volume. They blindly chase after rising prices when they see an uptrend and panic sell when they see a downturn, ultimately likely falling into traps. In fact, combining trading volume for judgment can help avoid the vast majority of ineffective market movements. The simplest principle is: High volume leads to price, low volume is hard to sustain. Any reliable trend must be accompanied by an effective increase in trading volume, indicating real capital entering the market and a consensus among market participants.

In daily trading, we only need to master two core patterns to understand most market trends. The first is an increase in volume, which is when trading volume is significantly higher than the average level of a previous period. A rising volume signifies that bullish funds are actively entering, indicating strong buying power, and the uptrend is supported by funds and has a stronger continuation; whereas a falling volume represents the spread of market panic, with funds concentrated in escape, establishing a clear bearish trend, so do not blindly try to catch the bottom.

The second is a decrease in volume, meaning trading volume continually decreases. A volume increase during an uptrend is mostly a false rise. Internal market funds exhibit a strong wait-and-see attitude, and without new capital to take over, the market is likely to briefly spike and then retreat, representing a trap to entice more buyers; a volume decrease during a downtrend indicates that selling pressure has been exhausted, market sentiment is stabilizing, and the downward momentum is insufficient, which usually signals that the market is about to stabilize.

Moreover, the most practical use of trading volume is to determine the authenticity of breakouts. Many times candlesticks appear to break through resistance levels, but in reality, they are false breakouts. In this case, trading volume is the best tool for identification. An effective breakout must be accompanied by an increase in volume, indicating that funds accept the current price level, and the trend can continue; while a breakout with low volume is mostly a trap to entice buyers, which will soon return and retrace.

The core of trading has never been about gambling on luck or guessing price movements, but about understanding capital logic. Complex indicators can lag and distort easily, but trading volume is the most authentic feedback of capital at the moment. There is no need to pursue flashy trading techniques; by focusing on understanding trading volume and grasping the underlying logic of price-volume relationships, one can see the essence of the market's long and short struggles, ensuring that every trade is based on solid reasoning and confidence.

For more practical content, follow the official account: Da Niu Talks Market Trends

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。