Price can lie for a little while. Volume is usually less talented at that.
In the Three Waves system, alignment across the weekly, 2-day, and 195-minute charts is already a filter. Add volume confirmation and the filter gets sharper. You stop taking the pretty Heikin-Ashi setups that have nobody behind them, and you start taking the ones where real money actually showed up.
Not another oscillator. Not a fourteenth moving average. Just one extra question: is anyone actually here?
The Setup (Or: Why Pretty Candles Without Volume Are Just Decorations)
A clean weekly Heikin-Ashi trend looks impressive until you notice the volume fading underneath it. A 2-day confirmation looks convincing until the bars start shrinking. A 195-minute vertical crossover looks like an entry until you realize it printed on below-average volume.
Volume is the participation check. In this framework it works like this:
- On the weekly, rising or at least supportive volume tells you the institutional trend has sponsorship. Weak volume on a so-called trend is often just drift.
- On the 2-day, volume should confirm the intermediate move, not contradict it. Confirmation on thin volume is hesitation wearing a costume.
- On the 195-minute, volume above average is the last green light. A crossover without it is usually noise that survived the first two filters.
When price and volume agree across all three waves, the signal is stronger. When they don’t, stand aside. The market is allowed to look pretty and still be empty.
The Psychology (Or: Why We Ignore Volume Until It Costs Us)
Volume is boring. Price is exciting. Traders would rather argue about a candle color than ask whether the move had any sponsorship. That is how you end up in a “perfect” Three Waves setup that immediately stalls.
Waiting for volume confirmation feels like adding one more delay to a method that already demands patience. It is. That delay is the point. You are not trying to catch every aligned move. You are trying to catch the aligned moves that have actual participation.
I have taken the thin-volume versions of these trades. They look the same on a screenshot. They do not feel the same in a live account. The market has a polite but expensive way of distinguishing a trend from a rumor painted in Heikin-Ashi.
How It Works in Practice (The Non-Boring Version)
Keep the same sequence. Add one filter at each step:
- Weekly Heikin-Ashi trend first. Then check volume relative to average. Is the boss actually being funded?
- 2-day confirmation next. Structure and momentum should match the weekly — and volume should support that confirmation.
- 195-minute trigger last. Wait for the vertical crossover and volume above average.
- Watch The Fade in both price and volume. Shrinking bodies plus declining volume across frames is often smart money stepping away, not a buying opportunity.
This works on indexes, bonds, gold, individual names — anywhere liquidity is real enough for volume to mean something. In thin names, treat volume even more skeptically. The filter is only as good as the market you apply it to.
The Evergreen Edge
Narratives change. Indicators multiply. The usefulness of asking whether a move has sponsorship does not. Volume will not predict the next headline. It will tell you whether the Three Waves alignment in front of you has any conviction behind it.
Price alignment without volume is a hypothesis. Price alignment with volume is a vote. The method gets stronger when you wait for both.
Everything is laid out in clear, practical detail in Thom Goolsby’s latest book Three Wave Trading Advantage — the exact timeframes, Heiken-Ashi rules, risk management, and the psychology of waiting for true alignment. No more 10+ indicators and analysis paralysis. No holy grail. Just a better way to listen to what the market is actually saying.
Support Charting Wealth’s work at Patreon at any of the three levels and receive the book, plus other trainings, gifts, and more: https://www.patreon.com/user?u=14138154
Follow the charts, not the noise. The Three Waves are already talking. Are you listening?
What do you think — still taking aligned setups on thin volume, or waiting for the market to prove it means it?
We urge you to “Follow the charts, NOT the noise!” and want to help you follow the market and improve your knowledge of stock and ETF movements.
Support our work at PATREON and receive GREAT benefits (training, gifts, etc…): https://www.patreon.com/user?u=14138154
Receive our STOCK ALERTS via TEXT when WEEKLY VERTICAL CROSSOVERS occur. Very valuable information! Less than 8 texts a month. Text “chartingwealth” to 33222 on your cell phone.
At ChartingWealth.com, http://chartingwealth.com every day the market is open, we chart the S&P 500, NASDAQ 100, Gold & Bonds. In just a few short minutes, we give you a valuable training update and quickly review the trends we see taking place in the market. At the end of every week, we give you an overview of what happened over the last five days and what’s on the calendar for the next trading week.
DISCLAIMER: We offer NO advice and make NO claims to expertise of any kind. This site is dedicated to knowledge and education through our stock chart training, reviews and other information — nothing more.
