One of the first rules in interpreting market strength is to use volume as a conviction for that strength. What we mean by this is without strong volume, a market move is weak.

Volume is the most simplest of indicators, yet the foundation for determining whether or not the indicators are valid. To find the volume of an asset, simply add up all the shares traded within a period.

When attempting to confirm a market trend, the first aspect that should be examined is whether or not the price momentum lines up with the volume momentum. If they confirm each other, the market move can be confirmed. If they don't, the market move is not valid.

One example to note, and probably the most important thing that every trader should know, is that if there is an increase in price with a decrease in volume, this market move is ALWAYS weak and very bearish.

One way of determining market strength (similar to the ADX), is to plot the volume oscillating technical indicator. The volume oscillator is the difference between the fast volume moving average (usually 14) and the slow volume moving average (usually 28). If a market is heading upward, the volume oscillator should rise above zero. When price is still heading upward and the oscillator begins to decline, this an early sign that the asset is becoming overbought. When the market begins to decline, the volume oscillator should fall below zero. If price is still declining and the oscillator begins to increase, the asset is being oversold.

So to conclude the first chapter to what should be every investing book, and if there ever needed to be a summary on technical analysis, investing, or trading, the first rule would be to examine volume in relation to price.