Hexun Investment Advisor Dong Kai: Eight Major Rules of Volume-Price Coordination

Today, we will decode the golden partnership in technical analysis—the eight major rules of volume and price coordination. Do you know how trading volume should cooperate with price increases? Why is volume-price coordination so accurate? Because it reveals the market’s true buying and selling intentions. Simply put, volume and price coordination is the golden duo of trading volume and price. Remember: an increase in volume with rising prices is a genuine bullish signal; a decrease in volume with rising prices is a false bullish signal; an increase in volume with falling prices is a true bearish signal; a decrease in volume with falling prices indicates a temporary adjustment.

There are eight major rules of volume and price coordination: First, price rising with increasing volume indicates major players are bullish, a buy signal. Second, price rising with decreasing volume suggests major players are distributing, a divergence signal. Third, price falling with increasing volume signals major players are selling off, a bearish signal. Fourth, price falling with decreasing volume indicates no significant selling, a wait-and-see signal. Fifth, price stable with increasing volume suggests a potential breakout. Sixth, price stable with decreasing volume indicates consolidation and patience is needed. Seventh, price rising with stable volume signifies gentle upward movement, continue holding. Eighth, price falling with stable volume indicates gentle correction, no need to panic. Simply put: consistent volume and price movement is the key; divergence should be approached with caution. Volume-price coordination is the honest language of the market—understanding it leads to profit.

There are two core types of volume-price coordination, each with different significance. One is the consistent type, where price and volume move in the same direction, indicating a healthy market. The other is divergence, where price and volume move in opposite directions, indicating a risky market. Remember: volume-price coordination is the market’s lie detector—consistency is reliable; divergence is dangerous.

Here are three key points to teach you: First, pay attention to volume-price consistency; the higher the consistency, the more genuine the trend. Second, be alert to divergence; the longer divergence persists, the greater the chance of a reversal. Third, consider trend position: during early upward trends, increasing volume is more important; in late stages, be cautious of volume increases. Look at this stock—perfect volume and price coordination as the price rises, then the price doubles. Volume-price coordination is like a mirror that reveals the true intentions of major players clearly.

Here are three practical tips: First, the rule filtering method—only use the most clear signals from the eight major rules. Second, the time verification method—confirm the effectiveness of signals over three consecutive days. Third, the position analysis method—combine stock price position to assess signal strength. Simply put: the rule of consistency outweighs divergence; bottom rules are more reliable than top rules.

Remember, volume-price coordination isn’t about having more rules; it’s about judging the strength of signals accurately.