Reliability of volume indications

Volume trends and volume indicators don’t always provide reliable signals. For example, a strong price trend may continue for some time even when the volume is steady or falling. Volume peaks that aren’t matched by significant price changes frequently occur and there seems no logical reason for them. Therefore I suggest you don’t act on volume changes and volume indicators without taking into account other indicators (such as moving averages, MACD and so on).

Tip

Use volume indications as a filter and not as a primary tool. Volume indications can provide useful additional information but shouldn’t be acted on in isolation.