1. Volume: Market Needs More Sellers

Creates a divergence

• Price makes new low, but volume is less

• Sign of fewer sellers at low price

• remember, no volume in Forex markets (so irrelevant for Forex traders)

• Sometimes going sideways is enought, if Bears see that rally is limited, will then be willing to sell again.

• Trader know if price falls more, even fewer sellers

• Market wants to maximum trading volume

• It will stop going down.

• Usually will bounce to find enough sellers