Previously, we have discussed about Volume as Technical Analysis Confirmation in Stocks Trading. This time, let’s discuss about another function of Volume in Stocks Trading which is as Buy/Sell Signal. For your information, Volume as technical analysis confirmation means that volume confirms whether other Technical Analysis (TA) Indicators’ signal is a real deal or fake. As example, I often use Volume as confirmation for Candlestick Patterns based Buy Signal or Candlestick Patterns based Sell Signal.
So far, I have discussed many technical analysis of Candlestick patterns as tool to decide whether the stocks start to reverse from down trend (bearish) to up trend (bullish) and vice versa. In stocks (or Forex) trading, these candlestick patterns are called as bullish reversal signals or bearish reversal signals. These reversal signals become very important in stocks analysis since tells us the best point/time to buy or sell the stocks for either maximum profit or minimum loss.