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Technical Analysis Explained, Fifth Edition: The Successful Investor's Guide to Spotting Investment Trends and Turning Points, 5th Edition by Martin J. Pring

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7 BASIC CHARACTERISTICS OF VOLUME

Almost everything that technicians use in plotting a specific security involves either the price itself or a statistical variation on it. Volume can offer a new dynamic in our interpretation of crowd psychology. Therefore, analyzing volume trends gives us a better understanding of how and why price patterns work. In effect, the study of the characteristics of volume gives greater depth to the weight-of-the-evidence approach described earlier. Volume not only measures the enthusiasm of buyers and sellers, but also is a variable that is totally independent of price. In this chapter, we will discuss some general principles of volume interpretation, and in Chapter 26 some individual volume indicators. We are beginning ...

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