1
Price up + volume up
Buyers keep accepting higher prices while participation expands.
Lesson · Volume and Order Flow
Price and Volume Relationships
Interpret the four basic combinations of price direction and changing participation.
Core concepts
What to understand
Keep the interpretation direct: participation, aggressive side, and actual price progress.
2
Price down + volume up
Sellers keep accepting lower prices while participation expands.
3
Price move + volume down
Price is progressing, but fewer participants are supporting the move.
Interactive lab
Change the market conditions
Use the controls and read the “What the market is doing” explanation after each change.
Price and Volume Relationships Lab
Synthetic educational data · no live market connection
MARKET DATA
Reading process
Follow the reading steps
Do not jump from one number to a trade. Describe the evidence first.
Choose direction
Identify whether closing prices are rising or falling.
Measure participation
Compare recent volume with its baseline.
Avoid certainty
Strong participation confirms activity, not guaranteed continuation.
Knowledge check
Check your interpretation
Select one answer for each question. Feedback appears immediately.
1. Price falls while volume expands. What is happening?
Falling prices plus expanding participation shows active selling pressure and downward progress.
2. Price rises while volume contracts. What is the best description?
Buyers are still moving price higher, but participation is not expanding.
3. Which variable establishes direction?
Direction is observed in price progress; volume describes participation.
4. The last fourteen bars average 1,250 contracts; the first fourteen averaged 1,000. What volume trend does the lab report?
1,250 ÷ 1,000 = 1.25, so participation expanded by 25%.
Practical rules
- Describe price first and volume second.
- Falling volume weakens evidence; it does not automatically reverse the trend.
- Treat mixed evidence as mixed, not as a forced signal.
Common mistakes
- Equating green candles with buyer-initiated volume.
- Assuming low-volume trends must immediately reverse.
- Using one bar instead of a sequence.
References
Official reading
The lab is simplified; these sources provide the underlying market and execution definitions.
CME Group · What is Volume?
Official overview of how futures volume is counted and interpreted.