When is it advisable to utilize volume statistics?

Volume statistics are particularly useful during periods when prices are rising or declining because they provide essential insights into the strength or weakness of a price movement. An increase in volume accompanying a price rise suggests strong buying interest, which can indicate a sustained trend. Conversely, when prices decline, a spike in volume can reflect panic selling or strong selling pressure.

By analyzing volume in conjunction with price movements, traders can make more informed decisions about the potential continuation or reversal of trends. This analytical approach helps identify whether price changes are supported by sufficient market participation, which is crucial for validating the reliability of the trend.

While volume can offer insights in various market conditions, its effectiveness is maximized during these more defined price movements, making this option the most prudent choice for utilizing volume statistics.