Why we read volume before price on every screen
Most screening tutorials start with moving averages or chart patterns. In our workshops, the first question is always about participation: is anyone actually trading this name?
Price can look compelling on a thinly traded stock. A clean breakout on low volume often reverses within days because there was no sustained interest behind the move. Volume tells you whether the market agrees with what price is showing.
Our minimum volume threshold
We set a floor based on average daily volume over 20 sessions, adjusted for market cap tier. Large-cap names in the VN30 need higher absolute volume than mid-caps in secondary boards. The exact number varies — what matters is that you define it before scanning, not after you find a chart you like.
Flagging unusual participation
After filtering for minimum volume, we flag days where volume exceeds 150% of the 20-day average. Context matters:
- Spike at resistance often signals distribution — sellers absorbing demand
- Spike at support can confirm accumulation — buyers stepping in at a level
- Spike mid-range without structure is noise until price develops a readable pattern
Volume declining while price rises
This divergence appears frequently on extended moves. We remove names from the candidate list when price makes new highs on three consecutive declining volume sessions unless there is a clear fundamental catalyst. The chart looks fine; participation says otherwise.
Practical application in a weekly scan
Start with your sector list. Apply the volume floor first — this alone typically cuts a 50-name list to 18–22. Then flag spikes on the remaining names before opening a single trend line. Only after volume passes do we study structure.
This order feels slower at first. Over time, participants report spending less total screening time because they stop analyzing charts that would never have been tradable anyway.