At that time, I was like most people, my eyes fixed on the ups and downs of the K-line, thinking that the volume bar next to it was just a decoration. It wasn't until I suffered considerable losses and paid enough tuition that I slowly understood - prices can deceive, but volume is hard to fake. Prices can be drawn, but trading volume is genuinely piled up with money; that is the market's most authentic breath.
I have seen too many people cheer "The bull market is here!" at a slight rise, and shout "The market has crashed!" at a small dip. But the truth often hides beneath those red and green bars. For example, if the price is rising but the volume is actually decreasing, the market is telling you: be careful, the rise is weak, and no one is following. Conversely, if the volume keeps decreasing when the price is falling, it might just be a washout, not a real drop.
I remember once during a market panic, everyone was selling. But I noticed that a certain mainstream coin had particularly high trading volume for several consecutive days at a low price, yet it didn't create new lows. At that time, I felt this didn't look like retail investors fleeing, but rather like someone quietly accumulating. Later, as the market gradually warmed up, those who entered at that time received good returns. This taught me one thing: don't just look at the price fluctuations; it's more important to see where the money is flowing.
Regarding those traces of 'big funds', I have summarized two points:
When they slowly accumulate assets, it often involves rapid rises followed by slow declines. They push prices up and then gradually drop, but the volume decreases during the drop. This indicates that selling pressure is not heavy and it's likely just to lower prices to acquire more chips.
When selling, it often drops significantly first and then rebounds weakly, with volume not keeping up. That kind of rebound is often an opportunity to exit, not to enter.
Another point that many people get wrong: the top does not necessarily have a massive volume; sometimes it's the lack of volume that poses real danger. When prices are high and can't move up, and the volume can't keep up, it indicates that no one is willing to take over; the drop isn't far off. The same goes for the bottom; when there's a large increase in volume in a single day, don't rush in; check if the subsequent volume can sustain. A rebound without volume often doesn't go far.
I have a few insights on price and volume that you can refer to:
If the price is not moving much but trading volume is quietly increasing, it may indicate a change.
The price is steadily rising, and the volume is gently following; the trend is relatively healthy.
The price is still rising, but the volume is lagging behind; you need to stay alert.
After a long decline, if there's a sudden drop with high volume, don't panic and sell; there may be funds supporting it.
When the volume reaches recent peaks, the price often stabilizes in the short term; if the volume shrinks to the extreme, it may not be far from the bottom.
As I walk to today, I feel that trading ultimately is about dealing with one's own mindset. Most of the time, I'm waiting and not acting easily. I only make a few trades when I'm really sure throughout the year, but I aim to position myself in high win-rate situations. The market will always be there, but your capital may not always be.
So don't always ask 'how much can I earn', but think more about 'what if I'm wrong'. Set a bottom line and let the right moments run a bit longer. In this market, living longer is much more important than making more in a single instance.
Ultimately, for me, trading volume is a kind of language of the market. It doesn't shout slogans or create emotions; it just calmly tells you what choices the funds are making. Learn to listen to it, and then maintain patience; perhaps this is the way that can help us go a little further.
Do you have any habits regarding observing trading volume? Let's chat in the comments.
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