To The Moon

This series aims to break down commonly used technical indicators simply and intuitively, helping investors improve their ability to interpret market trends, momentum, and risk. Whether you're a beginner or an experienced trader, you’ll quickly grasp the core logic behind each indicator, avoid common misuses, and strengthen your practical analysis skills.

1. What Volume Indicators Do We Need in Technical Analysis?

Volume indicators are tools that analyze trading volume to understand market strength, momentum, and potential price direction. They help traders see whether a price move is supported by strong participation or driven by weak activity. High volume often signals conviction, while low volume may indicate uncertainty.

Common uses:

Trend confirmation — Rising prices with rising volume suggest a strong uptrend; falling prices with rising volume suggest a strong downtrend.

1. Reversal signals — Divergences between price and volume can hint at trend exhaustion.

2. Breakout validation — True breakouts typically occur with a surge in volume.

3. Momentum assessment — Volume-based indicators show whether buyers or sellers are gaining control.

Popular indicators include:

• OBV (On-Balance Volume) — Tracks cumulative volume to show buying vs. selling pressure.

• Volume RSI — Measures volume momentum.

• Money Flow Index (MFI) — Volume + price to detect overbought/oversold conditions.

• VWAP — Shows the average price weighted by volume, often used for intraday support/resistance.

2 Common Bullish Patterns for Volume

A. Healthy Uptrend - Volume Confirmation

From January 2023 to July 2024, $Microsoft(MSFT)$ showed a clear volume-supported uptrend. Buying demand consistently outweighed selling pressure, reinforcing the strength and reliability of the trend.

Although this pattern doesn’t generate a precise entry signal, it provides solid confirmation that the market is trending upward. Likewise, the rally from April 2025 to August 2025 was strongly validated by increasing volume, indicating firm participation behind the price surge.

How to Spot a Healthy Uptrend?

Key characteristics to focus:

1. Higher highs and higher lows: Price steadily pushes upward, forming a staircase-like pattern.

2. Rising volume during upswings: Green or upward bars expand, showing strong buying interest.

3. Falling volume during pullbacks: Retracements occur on lighter volume, suggesting sellers lack conviction.

Easy analogy: It’s like walking up stairs while the cheering gets louder during each push upward and quieter during each rest.

This combination of price structure and volume behavior helps confirm a trend’s strength and reliability, making it a key concept in technical analysis.

B. Valid Breakout with High Volume

Example: $Tesla Motors(TSLA)$ , January 24–30, 2023

During this period, TSLA posted a clean breakout above resistance. The price surged with strong momentum, and volume spiked well above its average, confirming that buyers were forcefully supporting the move. This combination of high volume and strong candle structure made it a textbook valid breakout.

How to Spot a Valid Breakout?

Key Characteristics to focus:

1. Price breaks above resistance (or below support): The market pushes through a level that previously blocked price movement.

2. Volume surges to 150–200%+ of the average: A breakout is only reliable when strong participation confirms it.

3. Momentum candle leads the break: A large, decisive candle shows conviction, not hesitation.

Analogy: Like breaking through a door with a crowd pushing behind you — strength + support.

This is the very first part of our Technical Analysis Education series. In the following parts, we will introduce more bearish patterns and combination of indicators usage. Welcome to follow me and join the event!

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For example,

the stock was in a healthy uptrend in 2024.

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