If you look at the trading volume alone, it has no value. You don't understand the price changes corresponding to the trading volume. When we combine trading volume with price, we can start to understand the momentum in the market. When determining the strength of a trend, trading volume is undoubtedly the most important indicator; the market rises, falls, or fluctuates over time and trading volume.
In an uptrend, the volume of active buy orders should increase, which means strong demand has swept away all the sell orders at various price levels. In a downtrend, the volume of active sell orders should increase, which means sellers are offloading their positions to the buy orders hanging in the market. In a sideways market, the market acts like a sponge, absorbing both the sell orders and buy orders hitting the market.
Order flow tells us about the transaction conditions at a specific price level within a certain timeframe.
As you continue to observe the subsequent price movements, you can determine whether the market is strong or weak. Traditional charts simply correspond the total trading volume with the respective candlestick patterns; if we can also see the trading volume conditions at different price levels within a specific candlestick, we can gain a deeper understanding of the market.
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