One thing that's made a real difference in my trading: I stopped reacting to price and started watching volume first.
Here's what a legit pre-move volume signal looks like vs noise:
Signs it's real:
– Volume 2-3x the 20-day average on a relatively small price move (accumulation)
– Bid/ask spread tightens as volume rises (smart money, not retail panic)
– The spike happens during a consolidation, not at the tail end of a move
Signs it's noise:
– Volume spike happens after a 5% gap up (you're already late)
– The spike is one candle then immediately returns to average (one-off, no follow-through)
– Spreads widen during the spike (liquidity event, not directional)
The setup I like most: flat price action for 2+ weeks, then a 3x volume day with price barely moving. That's someone loading quietly. I want to be alongside that, not chasing after it breaks out publicly.
What do you all use to filter volume spikes? Curious if anyone's found better ways to distinguish accumulation from distribution.
Volume spikes before big moves – here's what I look for
byu/PropertyPrompts inStockMarket
Posted by PropertyPrompts