Chapter 6 Volume and Volatility
In addition to price movement and pattern, volume of trading and volatility (risk) are also valuable indicators. Focusing solely on price trends is a mistake because changes in volume indicate changes in trading activity, and such changes often accompany or even anticipate changes in price trends. The same is true for changes in volatility levels; broadening trading ranges or repeated violations of support or resistance indicate coming price changes.
Candlestick chart patterns are powerful price monitoring tools. When combined with the equally important volume and volatility signs, candlesticks are even more effective. Changes in volume and volatility can also confirm what price patterns imply about impending ...
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