Volume Chart Notes
Volume bars are read relative to what is normal for the same chart — the craft is comparison, not admiration of tall columns.
The baseline comes first. A running average, commonly twenty periods, is laid across the histogram so that each new bar can be classed as quiet, ordinary, or active against its own recent history. Without that line, a tall bar is just a tall bar.
Context comes second. Opening and closing intervals are mechanically busy, scheduled announcements concentrate volume into single columns, and expiry sessions swell derivatives volume. Most extremes on a chart are the calendar made visible, and reading them as conviction is the beginner's classic error.
Only after baseline and context does interpretation begin. An active bar that travels far shows effort rewarded; an active bar that goes nowhere shows effort absorbed. Both are sentences about the interval that just closed, and neither contains instructions for the next one.
Several misreadings recur often enough to name. Bar colour is inherited from the candle and says nothing by itself. Raw volume cannot be compared across instruments. Tick counts on forex platforms track activity but are not exchange volume. And no bar, however extreme, is a signal by itself.
A calm workflow keeps the craft small: establish the baseline, check the calendar, note the extremes, and then ask what price did with the participation it received. Everything beyond that is interpretation, and interpretation is where humility belongs.
Further reading