What you will learn
- What volume is, and what the colour and height of volume bars tell you
- How to compare volume against its average
- The 3 rules of volume
- 4 real examples on the Bitcoin 4H chart
- Why weekend volume is different
- A backtest, 3 questions to ask on every signal, and 3 beginner mistakes
Why did the signal fail?
On 11 October 2026 Bitcoin gave a Change of Character on the 4H chart, and one day later that signal failed. The chart was showing something we were not watching: volume.
What is volume?
Volume is how much was traded during one candle. Each volume bar sits under its candle: the height shows how much was traded, and the colour follows the candle, green when it closed up and red when it closed down.
Think of pushing a car. A light push barely moves it, a hard push sends it rolling. Volume is the strength of the push behind a price move.
Compare volume with its average
A single volume bar means little on its own. What matters is whether it is above or below the recent average. A move on clearly above-average volume has real participation behind it. A move on below-average volume is weak and easier to reverse.
4 real examples on the Bitcoin 4H chart
- 8 October: a sharp sell-off and a long wick, and what the volume under it revealed.
- 11 October: the Change of Character that formed on weak weekend volume, which is why it did not hold.
- 12 October: the real breakdown, this time with strong volume behind it.
- 13 October: buyers stepping in at support, visible in the volume bars.
Why weekend volume is different
Fewer traders are active at the weekend, so volume is usually lower and signals that form then deserve extra caution.
How to use volume
Before acting on any signal, check the volume behind it. The lesson closes with a backtest, 3 questions to ask on every signal, and 3 common beginner mistakes.
This lesson is for education only and is not financial advice. Trading is risky and you can lose money. Every example uses past market data and does not predict future results.
