Volume is the number of shares traded in a day. It confirms the conviction behind price moves: a big price move on high volume is far more meaningful than the same move on low volume. Volume is often called 'the fuel' of price action.
Rising price + rising volume: strong uptrend -- institutions are buying.
Rising price + falling volume: weak uptrend -- buying is losing steam.
Falling price + rising volume: strong selling -- get out or wait.
Falling price + falling volume: weak selling -- may consolidate and reverse.
A spike of 2x or more the average daily volume signals something significant:
Spike up on news: institutional buying -- often continues short-term.
Spike on a down day: capitulation -- sellers exhausted, possible bottom.
Spike with no news: insider activity or algorithmic trigger -- watch closely.
Volume spikes (2x avg) trigger alerts. The volume ratio (today vs 20-day avg) appears in the dashboard. The ML model uses volume ratio to detect unusual institutional activity before earnings or breakouts.
Related: Breakouts & Breakdowns • MACD -- Moving Average Convergence Divergence • RSI -- Relative Strength Index