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What does volume trading stand for in crypto trading and how to use it?

Key Points

  1. What it is: technical
  2. Tools that do it: #tradingview #ftx 
Tradingview never trade alone

Volume trading is a popular technique in cryptocurrency trading.

Volume trading is not particular to crypto markets, it is used on legacy markets as well.

Broadly, volume trading is any trading technique that takes into account changes in traded volume on a market.

On crypto trading forums, when someone talks about volume trading, it will usually be volume profile trading.

Glossary entries where you can learn about volume trading

Volume Profile Strategies

Volume trading strategies that spread the most include:

  • Volume support/resistance: Price levels where very high volume was traded will in the future form the base of ranges. Evidently these are areas where a lot of the asset changed hands, so they can be considered support/resistance levels.
  • Filling the gap: If the price action went fast on a very thin volume, the theory says the price will throw back to the volume support and “fill the gap”.
  • Volume vs price change: If the price moves a lot on a thin volume, the sustainability of the action is questioned. This situation can paint the Bart Simpson pattern.

There are several technical analysis tools and devices that crypto traders like to use for volume trading.

The most popular volume trading indicators:

Granular Volume Trading is Expensive

Volume Trading tools are marketed as an advanced tools. It is not that volume trading would be difficult to understand, but that VP gives rich, granular (…expensive) market data. Your usual free TA tools give you averaged, statistical data.

Get VPVR with TradingView PRO   Get VPVR with Tensorcharts PRO

There are free volume profile indicators in the scripts in TradingView library.

These are not the same but they are a start.

Best Tools for Crypto Volume Trading

Read our list of tools for crypto traders for more free and freemium options.

Technical analysis tools that combine well with volume trading

Volume profile is often used as a complement to other methods of technical analysis.

Last but not least: If you are a fan of the Wyckoff method, plotting volume on the side of the chart can help you analyze market ranges.

Want to *really* learn crypto charting & technical analysis?

Hate to break it to you, but there's no trading school, no neatly structured course and no simple how to.
Read our articles to get familiar with the tools, but try everything hands on. Trading will press your emotions, you can only really learn it as you go.

All the good crypto charting tools and platforms are accessible for FREE in either TradingView app or at Bitfinex. Just start!

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