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Chapter 9: Volume > Equi-volume charts

Equi-volume charts

I introduced the equi-volume chart in chapter 2 but now I’ll look at it in more detail. This chart is rather similar to a candle chart except that the width of the bars is proportional to the volume and consequently this chart doesn’t have a linear x-axis time scale. I’ll summarise the important indications on this chart:

⇒ Thin bars indicate low volume and less significance to the price move.

⇒ Long, thin bars (either up or down) indicate large price jumps on small volume.

⇒ Wide bars indicate high volume and more significance to the price move.

⇒ A wide bar on an up day during a downtrend is often a precursor to a trend change to uptrend.

⇒ A wide bar on a down day during an uptrend flashes a warning that the trend may be faltering.


  

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