Volume and relative volume

Volume is how much was traded. This lesson shows why a move carries more weight when many people trade it, and how a bot decides what counts as a lot.

Volume is the total amount traded in a period. If 400 BTC changed hands between 10:00 and 10:15, the volume of that 15m candle is 400 BTC. Each trade counts once, because the coins one person bought are the coins another person sold.

Charts usually show volume as bars under the candles, counted in coins or in dollars.

Tap any bar to read its numbers.

Here the price jumps in half an hour. The move is identical in both versions; only the amount of trading changes.

With little volume, a few trades were enough to move the price, and a few trades the other way can undo it. With heavy volume, many traders took part. Traders often read that as a move with more behind it, although it guarantees nothing about what comes next.

A quarter hour that is busy for SOL can be a quiet one for BTC. Each market has its own normal, and that normal also shifts through the day.

A fixed number like "volume above $10M" would fire all the time on BTC and almost never on SOL. Switch to against its own average to put both markets on the same scale.

Relative volume divides the current candle's volume by the average of the candles before it. 1× is a normal candle; 2× is twice the usual trading.

The lookback decides what "usual" means: the average of the last 10, 20 or 50 candles. This chart has a busy stretch in the middle, so a longer lookback takes it in and raises the average.

Drag the slider to change the current candle and see when the condition is met.

Some traders place an order at a price and wait for someone to accept it. Others want to trade right away and take the best price on offer. Those are the takers.

When most taker volume is buying, takers are working through the sell orders and lifting the price. The taker buy ratio is the share of volume where the taker was buying; 50% is balanced.

This is 12 hours of BTC in 5m candles. The Volume spike template fires when 5m volume reaches 4× the average of the last 20 candles.

Move the multiple and count the dots. At 2× the bot fires often, including on ordinary busy moments. At 5× it waits for the unusual ones. Neither is right or wrong; it depends on how many Signals you want.

Three quick questions, then a bot to build.

Read the strategy and set up a bot that follows it, with the direction and the conditions it names and no others. The strategy also uses the price change from the first lesson. Passing depends on the build alone. Once it's right, the bot fires and you see what the market did next, which won't always go your way.