Lesson 9: Volume and Candlesticks

🕯️ Candlestick Patterns in 5 Minutes · Lesson 9 of 10

Lesson 8 showed that a candle at a real level, in line with the trend, beats the same candle floating in empty space. There's one more layer that tells you how serious the move is, and it sits right under every candle on your chart.

Volume is the count of how many shares traded during that bar. A candle shows you the price story. Volume shows you how many people were actually in the room when it happened. A reversal that ten people made carries less weight than the same reversal made by ten thousand.

Volume is the size of the crowd

Think of the candle as the headline and volume as the turnout. A bullish engulfing bar says buyers took over. Heavy volume on that bar says a big crowd took over. Thin volume says a few stragglers did, and a few stragglers rarely hold a level for long.

You don't need a precise number here. You're comparing this bar's volume to the recent bars around it. Taller than usual means more interest than usual. Shorter than usual means people stayed home. If volume is new to you, the guide to volume in trading breaks down the basics.

High volume confirms a reversal

This is the pairing you want. A reversal candle backed by a spike in volume is the strongest version of the signal.

Say a stock has been sliding for two weeks and prints a hammer at support. Now the volume bar under that hammer is the tallest one in a month. That tells you sellers threw everything they had at the level and buyers still absorbed it and pushed price back up. Real money changed hands defending that floor. That hammer means a lot more than a quiet one.

Same logic at the top. A shooting star at resistance on huge volume says buyers tried hard to break out and got slammed back. The crowd showed up and the move still failed. That's a meaningful rejection.

Low volume is the warning sign

Now flip it. A textbook reversal candle on weak volume should make you cautious, not excited.

A bullish engulfing bar on the lightest volume in weeks looks great and means little. Almost nobody participated. The price moved because trading was thin, not because a crowd decided to buy. These are the candles that look perfect in the moment and quietly fail an hour later.

Breakouts are where this bites people hardest. A candle pushing through resistance on weak volume often slips right back under the level. No buyers showed up to keep it there. When a level breaks on a quiet bar, treat it as suspicious until volume backs it up.

Low volume doesn't always mean the signal is dead. But it knocks your confidence down, and it should knock your size down too.

Use it as a filter, not a trigger

Volume isn't a buy signal on its own. A giant volume bar with no clear candle and no level nearby tells you something happened, but not what to do. Volume earns its keep as a filter on signals you already found.

So the order matters. You spot the candle. You check the level from Lesson 8. Then you glance down at volume to grade how much to trust it. Heavy volume turns a maybe into a yes. Light volume turns a maybe into a pass. The candle, the location, and the crowd all pointing the same way is the combination worth acting on.

Next up

You now have the three pieces that matter: the pattern, where it sits, and how many people were behind it. Lesson 10 ties all nine lessons into one repeatable routine you can run on any chart, plus the safest way to practice it before a dollar is on the line.