Volume answers the question 'how serious is this movement.' A price increase on high volume means that many participants are involved. The same increase on low volume indicates that only a few caused the price movement, and there will be no one to support it.
From here are the main working combinations. A movement with increasing volume usually continues. A movement where the price goes further but the volume decreases often peters out. A breakout of a level without volume is a typical candidate for a false move. A sharp surge in volume after a long movement often marks the moment when the last latecomers enter the trade and often coincides with a reversal.
An important caveat about different markets. On the exchange, volume is known exactly because all trades go through a single platform. On decentralized markets, for example in the currency market, only tick volume is available - the number of price changes, not the actual turnover. It's a decent substitute, but it's worth remembering the difference.
A separate family of tools builds a profile from volume: it shows not when trading occurred, but at which prices the most deals took place. Areas with maximum volume usually act as magnets and as boundaries because that is where the interest of most participants is concentrated.
