Definition
Stopping Volume is high or climactic volume on down bars near the end of a decline, with closes away from the lows. A cluster often shows professional demand absorbing supply and slowing markdown.
Market psychology
Heavy selling is met by sufficient buying to prevent the expected downside result.
Recognition rules
- Appears after a decline
- Down bars carry high relative volume
- Closes reject the lows
- Downward progress contracts and a rally develops
Common mistakes
- Assuming high volume guarantees a bottom
- Ignoring continued closes on the lows
Teaching example
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Read a text alternative
Persistent effort fails to extend the decline. The cluster, rather than any isolated candle, suggests demand is absorbing supply.
- Market phase
- Accumulation
- Pattern
- Stopping Volume
- Timeframe
- H4
Which result suggests the volume is stopping the fall?
High effort without proportional downside result suggests demand is absorbing supply.