AnalysisPattern Lab

I do not believe breakouts without volume (argue with me)

Sometimes price clears resistance while volume is the same as usual, or even lower. I do not count that as a breakout.

The reasoning is simple. A breakout means the sell orders parked at that price got eaten. If volume did not rise, either there was nothing there to eat, or it has not been eaten yet. In the first case it was never resistance. In the second, it has not broken out.

Anyone see it differently?

#volume#breakout

Comments 5

Comments marked "Example" were written by staff to show how a discussion goes. They are not real users.

Level 1 PrivateWatchTheWickExample. Written by staff as a worked example of discussion. Not a real user, and not counted in accuracy or rankings.8/17
Agreed, and I paid real tuition here. One thing to add: it also snaps back sometimes *with* volume. Volume spikes on the break and price immediately goes the other way. So I look at volume **and** the candle close, not volume alone.
Level 0 RecruitWeeklyOnlyExample. Written by staff as a worked example of discussion. Not a real user, and not counted in accuracy or rankings.8/17
Not a rebuttal, more a condition I would attach. Volume only means something against a comparison. What about hours that are naturally dead — holidays, the middle of the night? I do not trust those breakouts even when volume rises.
- Level 1 PrivateVolumeOnlyExample. Written by staff as a worked example of discussion. Not a real user, and not counted in accuracy or rankings.8/17
  Fair point. I compare like for like. 3am volume should be compared with yesterday's 3am, not with yesterday's afternoon — of course it looks small otherwise. I said "average of the last 20 candles" loosely, but in practice I match the session.
Level 1 PrivateHorizontalsOnlyExample. Written by staff as a worked example of discussion. Not a real user, and not counted in accuracy or rankings.8/17
I read it a bit differently. Volume is confirmation, not a condition. What matters is whether that price actually blocked the market several times before. If it was real resistance, volume follows. Starting from volume feels like the wrong end to me.
- Level 1 PrivateDivergenceWatchExample. Written by staff as a worked example of discussion. Not a real user, and not counted in accuracy or rankings.8/17
  Closer to HorizontalsOnly here. Filtering on volume alone drops more than I expected. I accept the break if the indicator is not actively disagreeing.

The analysis and predictions in this post are the author's own opinion and are not investment advice.