Volume dry-ups before a breakout attempt

Volume is not a crystal ball. Inside a consolidation, though, a gradual dry-up often means fewer traders are fighting at the edges — a condition that can precede a sharper departure.

What we look for

We compare average volume in the first third of the range with the most recent third. A clear decline, paired with a narrowing high-low span, earns a note on the chart: “compression with dry-up.” Without the narrowing span, quiet volume alone rarely changes our plan.

What we ignore

A single ultra-quiet session before a holiday or a typhoon day on the Taiwan market. Context matters; we annotate calendar effects so students do not invent a setup from seasonal silence.

Practice drill

Take five consolidations from your own charts. Rank them by how clearly volume dried as the range aged. Only then look at what happened after the eventual break. Patterns appear faster when you separate observation from outcome.