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| Use a multi-color volume histogram if you are limited to a single indicator in the lower pane of your price chart. Volume breathes differently than price. Narrow bars with limited visual information may be accompanied by dramatic volume spikes or unexpected lack of participation. Pay close attention to the trend of volume participation. This often provides early warning of reversals and breakouts. Volume is best studied on daily or weekly charts. The bias toward first/last hour participation and block trading can skew intraday volume readings. Focus only on the most liquid issues for reliable intraday volume feedback. |
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