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Questions and Answers
What is the primary benefit of analyzing volume trends in technical analysis?
What is the primary benefit of analyzing volume trends in technical analysis?
- To confirm the strength of a trend (correct)
- To identify price patterns
- To measure the enthusiasm of buyers and sellers
- To provide a more accurate measurement of price movements
What happens to volume in a rising market according to the principles of volume interpretation?
What happens to volume in a rising market according to the principles of volume interpretation?
- It contracts as the market rises
- It is unpredictable in a rising market
- It remains constant as the market rises
- It expands as the market rises (correct)
What can volume patterns reveal that price patterns may not?
What can volume patterns reveal that price patterns may not?
- A strengthening trend
- A random price movement
- A reversal of the trend (correct)
- A weakening trend
What is the significance of price and volume patterns disagreeing?
What is the significance of price and volume patterns disagreeing?
What is the weight-of-the-evidence approach in technical analysis?
What is the weight-of-the-evidence approach in technical analysis?
What is the interpretation of high volume accompanying an anemic rally?
What is the interpretation of high volume accompanying an anemic rally?
What is the significance of record volume coming off a major low?
What is the significance of record volume coming off a major low?
What does a volume crescendo followed by a slight contraction indicate?
What does a volume crescendo followed by a slight contraction indicate?
What is the interpretation of a small rounding top in price accompanied by a rounding bottom in volume?
What is the interpretation of a small rounding top in price accompanied by a rounding bottom in volume?
What is the significance of heavy volume with little price change following a decline?
What is the significance of heavy volume with little price change following a decline?
What is the primary indication of a rising price accompanied by a trend of falling volume?
What is the primary indication of a rising price accompanied by a trend of falling volume?
What is the significance of a new high in price that is not confirmed by volume?
What is the significance of a new high in price that is not confirmed by volume?
What does volume typically do during a bull move?
What does volume typically do during a bull move?
What is the combination of rising volume and rising price indicative of?
What is the combination of rising volume and rising price indicative of?
What does volume measure in relation to price movements?
What does volume measure in relation to price movements?
What can be inferred from a significant increase in activity as the price starts to decline?
What can be inferred from a significant increase in activity as the price starts to decline?
What is characteristic of an exhaustion move in a price pattern?
What is characteristic of an exhaustion move in a price pattern?
What does a bullish sign indicate when a previous low is being tested with low volume?
What does a bullish sign indicate when a previous low is being tested with low volume?
What does a downside breakout from a price pattern on heavy volume indicate?
What does a downside breakout from a price pattern on heavy volume indicate?
What is the significance of a reversal dependent on?
What is the significance of a reversal dependent on?
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