Volume Cycles tracks the cyclical nature of volume expansion and contraction. Markets expand volume during trends, then contract during consolidations. Recognizing these cycles helps traders anticipate breakouts and confirm trend changes.
Key Use: Anticipate volume expansion before major price moves using cycle patterns.
Volume Expansion
Volume above historical average; confirms trending phase.
Volume Contraction
Volume below average; signals consolidation/rest phase.
Volume Crescendo
Increasing volume over multiple bars; exhaustion warning.
Breakout Confirmation
Expansion phase + price breakout = strong signal.
Exhaustion Detection
Crescendo volume on impulse = reversal likely near.
Trading Phase Identification
Trend vs consolidation phase recognition for strategy selection.
✓ Advantages
⚠ Limitations