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Log in with DiscordVolume Spikes
A volume spike is a sharp increase in shares traded compared with nearby periods. On a chart, it often appears as a volume bar much taller than the bars around it.
The bar marks a burst of trading. To understand that burst, look at where price was, how it moved during the candle, and what happened afterward.
A Burst At Resistance
In this example, a stock trades below resistance at $12.00. Its last four completed five-minute bars each contain about 10,000 shares. The next contains 60,000 as price moves above the level.
That is six times the volume of one of those recent bars. It is a clear local increase, although it does not tell us whether 60,000 shares is unusual for that time of day across earlier sessions.
Imagine two possible price sequences following that burst:
| Candle | Shares traded in both examples | Example A close | Example B close |
|---|---|---|---|
| Spike candle | 60,000 | $12.10 | $11.98 |
| Next candle | 35,000 | $12.08 | $11.90 |
| Following candle | 25,000 | $12.15 | $11.85 |
In Example A, the spike candle closes above resistance and the next two candles also close above it. In Example B, price trades above the level during the spike but closes back below it and continues lower.
The volume sequence is identical. The price response differs. A large burst can appear during a breakout that holds or an attempt that fails.
Where The Spike Happens Matters
A spike during the first test of resistance differs from one after several large candles have already carried price far above that level. In the second case, the stock may be much farther from the area where the trading idea would fail.
Sudden activity can follow news, appear at the open, accompany a breakdown, or occur during a brief move with no known catalyst. A catalyst is an event, such as earnings or a company announcement, that may affect interest in the stock. The volume bar alone does not identify the cause.
The candle's position and closing price help explain the response. A large volume bar under a candle with a long upper wick shows substantial trading during a period when price moved higher and then gave back part of that move. It does not identify who bought or sold.
After The Burst
Smaller following bars mean fewer shares traded during those intervals. Price may still move higher, trade sideways or decline. Falling volume does not force a reversal.
The burst does not show how many shares are available for the next order. The spread and shares displayed at nearby prices can change even while the day's volume total remains high.
For a daily chart, the same idea applies over a longer period: a high-volume day shows a burst relative to surrounding days. It does not reveal the minute-by-minute trading within that day.
A Spike Versus High RVOL
A stock can accumulate high relative volume through sustained activity across the morning. Another can show a single local spike but remain below its usual day's activity. A spike compares the burst with nearby bars; RVOL uses the particular historical average chosen by the tool.
If a spike occurs after price is already far above resistance, does it show that the move has just started? No. The earlier candles show how far price has already traveled. The next lesson, Stock Liquidity, explains why current execution conditions also matter.