One of the most effective ways to understand a market is through the relationship between volume and price.
Volume represents effort.
Price movement represents result.
In a healthy trend, these two should align.
- Strong upward movement should be supported by increasing volume
- Weak movement despite high volume suggests resistance
The most valuable signals occur when this relationship breaks down.
For example:
- High volume with limited upward progress may indicate supply
- Increasing effort with diminishing result often signals exhaustion
These divergences reveal what is happening beneath the surface.
Rather than asking whether volume is high or low, the more useful question is:
How is price responding to that volume?
This shift in perspective provides a deeper understanding of market behaviour.