#Alpha 积分系统上线 In candlestick analysis, VOL (Trading Volume) is the core indicator reflecting the market's trading activity, and its combination with price movement can help determine trend strength, potential reversals, etc. Below are the core usage methods of VOL in candlesticks:

1. The Basic Relationship Between Trading Volume and Price

Trading Volume is the "energy" of price movement, and the core logic is: price movement needs the support of trading volume, and whether the volume and price are in coordination directly affects the credibility of the trend.

- Increased volume with rising prices: When the stock price rises and the trading volume expands, it indicates that buyers are actively entering the market, suggesting that the trend is likely to continue (strong signal).

- Increase in volume with price decline: When the stock price falls while trading volume increases, it indicates heavy selling pressure from the sellers and dominance of the bears, signaling the need to be cautious about a continued decline.

- Price movement with decreasing trading volume: Stock prices rise but trading volume shrinks, indicating insufficient buying power, and the trend may correct.

- Decreased volume with price decline: The stock price is falling and the trading volume is shrinking, indicating reduced selling pressure and possibly approaching the bottom (but requires subsequent volume increase for confirmation).

2. Key Trading Volume Pattern Applications

1. Volume Breakthrough
The stock price is near key resistance levels (such as moving averages and previous highs), suddenly releasing trading volume far greater than the recent average, and the price simultaneously rises to break through the resistance.


- Signal: Confirmation of the upward trend initiation, can be considered as a buy reference.

- Example: After the stock price moves sideways, on a certain day the Trading Volume expands by more than 50% compared to the average of the previous 5 days, while the Candlestick breaks through the platform high.

2. Volume Reduction Pullback
In an upward trend, the stock price experiences a short-term pullback, but the Trading Volume significantly decreases (below the recent average volume).


- Signal: Indicates that the pullback selling pressure is small, the main force has not exited in large numbers, the trend has not been broken, it may be a short-term washout, and there is hope for continued upward movement in the future.

3. Trading Volume Decline/Top Trading Volume
When the stock price is in a high level consolidation or at the end of an uptrend, it suddenly drops with a surge in volume (trading volume spikes), or the candlestick shows a long upper shadow, a large bearish candle, and increased volume.


- Signal: It may be the main force offloading, top risk is evident, need to be wary of the downtrend.

4. Volume at the Bottom
After a long-term decline in stock prices, the Trading Volume has shrunk to a recent low level (such as reaching a new low in half a year), and the price no longer makes new lows.


- Signal: Selling pressure exhausted, bottom approaching, but need to wait for subsequent volume increase to confirm reversal ("price movement after low trading volume").

5. Trading Volume Divergence


- Price increase with decreasing trading volume divergence: Stock price hits a new high, but the trading volume has not increased in sync and may even have decreased, indicating insufficient upward momentum and a potential peak.

- Price drop with shrinking volume divergence: The stock price hits a new low, but the Trading Volume has not increased, indicating that the downward momentum is weakening, and a bottom may be in sight.

3. Practical Precautions

- Combining Trends: Trading Volume should be analyzed in conjunction with the overall trend (upward/downward/sideways); the significance of the Trading Volume of a single Candlestick is limited.

- Reference average volume: Use the recent average trading volume (such as 5-day, 10-day) as a benchmark to determine "increase in volume" or "decrease in volume" (usually an increase of more than 50% is considered an increase in volume).

- Avoid single reliance: Trading Volume should be combined with Candlestick patterns, moving averages, MACD, and other indicators for comprehensive judgment to reduce misjudgment.

By observing the interaction between Trading Volume and price movement, one can more clearly identify the flow of market funds and changes in long and short forces, providing important references for trading decisions.