Technical Analysis Checklist: Checking Volume
Learn how to check volume as part of a technical analysis checklist, including the important tick volume caveat for spot forex.
- 7 min read
- For beginners
- Educational
- Bài học 4 trên 7
- 1How to Build a Technical Analysis Checklist?
- 2Technical Analysis Checklist: Checking Market Trend
- 3Technical Analysis Checklist: Identifying Key Levels
- 4Technical Analysis Checklist: Checking Volume
- 5Technical Analysis Checklist: Reviewing Indicator Context
- 6Technical Analysis Checklist: Checking Event Risk
- 7Checklist Item: Risk-to-Reward Check
This lesson explores the third checklist item: reviewing volume behaviour, drawing on the Volume Analysis and Volume-Based Indicators units covered earlier in this group.
This is general educational content describing a checklist item, not a specific trading recommendation.
Recap: The Tick Volume Caveat
As covered in the Volume Analysis unit's overview, it's essential to remember that spot forex platforms generally display tick volume — a count of price changes — rather than actual traded volume, given the market's decentralized structure. This caveat should inform how much weight volume analysis is given specifically for forex instruments within this checklist.
What to Check Regarding Volume
This checklist item generally involves checking for volume spikes (covered in the Volume Spikes lesson) near key levels identified in the previous checklist item, assessing whether recent volume trends are rising or falling relative to the established trend (covered in the Rising Volume vs Falling Volume lesson), and considering price-volume confirmation or divergence (covered in that unit's dedicated lesson).
Incorporating Volume-Based Indicators Where Relevant
Where applicable and available, this step can also incorporate the OBV and accumulation/distribution concepts covered in the Volume-Based Indicators unit, keeping in mind the limitations covered in that unit's final lesson, including sensitivity to volume spikes and reduced reliability during low-volume periods.
Connecting Volume to the Rest of the Checklist
As covered in the Volume During Breakouts and Reversals lesson, volume analysis is particularly relevant when combined with the key levels checklist item — checking whether a breakout or reaction at a key level is accompanied by supportive volume behaviour, rather than reviewing volume as a completely separate, disconnected step.
Summary
Checking volume — including spikes, trends, and price-volume confirmation, subject to the important tick volume caveat for spot forex — forms the third checklist item, best connected directly to the key levels item by checking whether reactions at those levels are accompanied by supportive volume behaviour. Volume-based indicators like OBV can be incorporated where relevant, with their specific limitations kept in mind.
Frequently Asked Questions
Since spot forex platforms display tick volume rather than actual traded volume, this affects how much weight volume analysis should be given for forex instruments specifically.
Risk Warning
Trading forex and CFDs involves significant risk and may not be suitable for all investors. You may lose all of your invested capital. Please ensure you fully understand the risks before trading.
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