Does anyone knows logic behind Volume Candle?


I would like to understand the exact mathematical logic behind volume candle, does anyone know it?



Volume is one of the factor I consider while trading.

I am giving example here, let’s say price is moving up with high volume in that time frame then it is a sign that smart money/operator/institutions are buying the stock. So I can expect price will go high in near future. So I can buy that stock.

Similarly if there is huge volume in selling side then I can expect smart money is selling it so price will go more down.

As per my understanding, one should not trade by considering only volume candle. You should consider nearest support & resistance level, PA, etc.

One more example, in an uptrend, price will go up with high volume & there will be pull back with smaller volumes. This is trick by institutions to reduce the price & buy at cheap & again price go up.
Similarly in down trend, price will go down then a pull back happen with small volume. And after that price again fall down.

In such condition, we should not exit the trade. Just sit tight.

What if the price is rising with average volume.Is it a favourable situation?

Then I would buy the stock after checking the nearest resistance level & risk reward ratio.