What is relative volume in stocks?
What Is Relative Volume? Relative Volume is a trading indicator primarily used by day traders that compares the current trading volume relative to the usual trading volume in the past. The metric volume reflects the number of shares traded of a specific stock.
How do I find a stock with high volume ratio?
In the drop-down menu, go to liquidity, then average volume, and select the period you prefer. From there, you can set your scanner to find stocks that have a high volume ratio. Remember to use the % option and keep in mind that every 100% will equal one.
How to find the rvol of a stock?
Finding out the RVOL for any stock is very easy and can be done by this simple formula Relative Volume = Current Volume
How do I check relative volume in real time?
One way to check relative volume in real time is using Trade Ideas – with our custom scanner you can add a column to your scan and see explosions in relative volume in real time. While the relative volume indicator is an excellent indicator of trading, there are quite a few things one needs to consider while conducting trades using this tool.
How do you calculate relative volume?
Relative Volume consists of Volume divided by Average Volume where Average Volume is a Simple Moving Average, calculated on the basis of the past 10 periods (not taking into account the current volume bar). Relative Volume = volume / average volume.
What is the relative volume of a stock?
Relative Volume (often times called RVOL) is an indicator that tells traders how current trading volume is compared to past trading volume over a given period. It is kind of a like a radar for how “in-play” a stock is.
What is relative volume indicator?
The Relative Volume (RVOL) indicator compares volume data for each price bar with the average volume over a specified number of prior bars. The RVOL ratio produced allows chartists to easily spot setups where unusually high or low volume is powering a price move.
What is a good number for relative volume?
What's a Good Relative Volume Ratio? During premarket, I look for stocks that have traded at least their average volume. By the time the market opens, I've narrowed it down to stocks that have a relative volume ratio of at least 4.
How do I scan for relative volume thinkorswim?
0:4411:27How to Scan for Increasing Volume in ThinkOrSwim (Beginner-Friendly)YouTubeStart of suggested clipEnd of suggested clipFirst let's open up this study this is a free study it's available inside of thinkorswim just searchMoreFirst let's open up this study this is a free study it's available inside of thinkorswim just search volume average right here. Now inside of this code.
How do you find relative volume in Webull?
4:5324:59How to Find Fast-Moving Stocks on the Webull Scanner - YouTubeYouTubeStart of suggested clipEnd of suggested clip75.95 million it's definitely a lot more than 16.3 million and yet doing some quick math on that theMore75.95 million it's definitely a lot more than 16.3 million and yet doing some quick math on that the relative volume if you divide 75.95 million by 16.3 million you'll get a relative number of 4.6.
What causes high relative volume?
A high relative volume means that the demand for the particular stock is relatively high right now. This is typically caused by a catalyst like earnings announcements, mergers, or other news. Hight relative volume also often appears together with a huge gap at the market open.
Which is more useful absolute or relative volume?
Relative volumes are useful when there is a high degree of variation in brain sizes obscuring potentially interesting effects and are generally easier to model. Absolute volumes on the other hand provide information in cannonical units that may be more intuitive to other researchers.
What is an ATR in trading?
Description. Average True Range (ATR) is the average of true ranges over the specified period. ATR measures volatility, taking into account any gaps in the price movement. Typically, the ATR calculation is based on 14 periods, which can be intraday, daily, weekly, or monthly.
How do you trade with relative volume?
6:3439:33How I Use Relative Volume to Predict Home Run Trades - YouTubeYouTubeStart of suggested clipEnd of suggested clipSo relative volume in contrast to total volume compares. The volume today to what is normal for thatMoreSo relative volume in contrast to total volume compares. The volume today to what is normal for that stock. And it's over a set period of days and I don't know if different platforms might use a
How do you predict a stock spike?
There are two ways one can predict stock price. One is by evaluation of the stock's intrinsic value. Second is by trying to guess stock's future PE and EPS.
How do you predict stocks for day trading?
Day traders should select stocks that have ample liquidity, mid to high volatility, and group followers. Identifying the right stocks for intraday trading involves isolating the current market trend from any surrounding noise and then capitalizing on that trend.
How to find high volume ratio in stocks?
Inside the volume block, set your parameter to criteria. In the drop-down menu, go to liquidity, then average volume, and select the period you prefer. From there, you can set your scanner to find stocks that have a high volume ratio.
What does relative volume tell us?
Without volume, price doesn’t move much. Relative volume tells us how many shares have traded in relation to how many shares are usually traded. It can be a great indicator that unusual price action may be on the way. Sure, there are low-volume breakouts that grind away. Those can be interesting to a position trader.
How do traders use relative volume?
Some traders use relative volume to decide which stocks they’re going to watch. It can be helpful. Let’s say you set your scanners to find stocks that are trading one million shares in a day. At the end of the day you run your scan and come up with 1,000 stocks. That won’t help you find a trade.
What time period do stocks follow volume?
For the most part, stocks tend to follow a volume curve throughout the day. Different time periods see different kinds of action. The morning is the busiest period, in the first hour of the day. Then there’s a midday lull, followed by an afternoon push.
How long is relative volume?
Averages are built from several factors using a period of time — usually five days, 30 days, or 60 days. In theory, you could use whatever period you like.
Do you have to be a math genius to know relative volume?
Conclusion. As you can see, you don’t have to be a math genius or a programmer to benefit from relative volume. In fact, you can often tell at a glance how liquid a stock is. With a few brief calculations, you can decide which stock may have the most eyes on it.
Does StocksToTrade have a scanner?
StocksToTrade doesn’t have an RVol scanner built in, but it does have an easy way to build your own custom scans. It’s simple to add relative volume to any scan you build.
What Is Relative Volume?
Relative Volume is a trading indicator primarily used by day traders that compares the current trading volume relative to the usual trading volume in the past.
What To Do With the Information About Relative Volume?
As a day trader, you want to trade liquid stocks with low spreads to ensure excellent fills. The higher the volume of a given stock, the lower the spread between Bid and Ask.
How To Identify High Relative Volume?
High relative volume can be easily identified by using a stock screener. My favorite is Trade Ideas since I can easily combine the filter for a gap of at least +3% along with the filter of high relative volume of at least 3:1.
What To Do next?
The high relative volume filter helps get your watchlist down to a manageable list of shares for a specific trading day. Now it is essential to check if the supply and demand remain at a high level. Sometimes it happens, that one huge block trade leads to the high relative volume ratio.
How To Get Started?
High relative volume needs to be combined with a trading strategy. Breakout strategies work well on high volume. That can be new daily highs, higher highs, higher lows with bar by bar confirmation or even a breakout within a specific time-frame above the previous candle high.
Why is relative volume important?
The Relative volume indicator is essential for traders to know which stocks are being watched. And it also helps you see which stocks will make the next big moves. The bottom line is relative volume is akin to unusual volume. It’s not “normal” volume ...
What does it mean when the RVOL is at two?
If the RVOL is at two or is more than two, then the stock is in play. The higher the RVOL, the more liquidity day traders will be willing to take. For day traders, a stock with more volume is better traded than stocks with a low volume. Higher volume stocks have much higher liquidity and tend to trade better than lower volume stocks.
What is the best indicator to know about trading?
One good indicator that tells traders about where the action will be is the relative volume indicator . This indicator works like radar and tells you about how in play a specific stock ...
What does a crossover do on a RVOL?
Crossover signals are another useful feature in the RVOL. The signal detects a spike in volume, which causes a crossover of the user set. As a result, a red or a green dot will appear at the top, and the signals indicate whether or not it is time to buy or sell the asset.
Is volume less or more unpredictable in stocks?
That being said it’s worth a closer look. Stocks that are experiencing less volume, or average volume are not as interesting. They can be more unpredictable. And there are also a lot less traders watching these stocks; which can result in things like choppy price action, or sideways snooze fests.
Is volume indicator good for penny stocks?
It doesn’t matter if you are trading penny stocks or large caps, use more than one system or tool to confirm your trade. Confluence is key! When combined with another indicator like the momentum and strength indicator, the volume indicator is an excellent trading strategy.
What is volume in stock trading?
Volume is simply the number of shares of a stock being traded in a given timeframe. This can provide some information about a stock’s liquidity, but absolute volume isn’t all that helpful on its own. The absolute trading volume around a popular stock like Apple will almost always be higher than the absolute volume around a penny stock. ...
Why do traders use relative volume?
Relative volume, as this is known, is widely used by traders to find stocks to trade, confirm trading setups, and more. In this guide, we’ll explain the concepts behind relative volume ...
Why is relative volume important?
Relative volume is a key metric for stock traders because it provides information about what stocks are receiving attention from the market. Stocks that have high relative volume also typically have high volatility, which presents opportunities for day trading. Stocks that have low relative volume are probably ...
How to spot high volatility stocks?
Traders are always on the lookout for stocks that are experiencing high volatility. One of the best ways to spot these stocks is by looking at trading volume, or the number of shares that are changing hands in a given time period. Even better, traders can compare volume at any time against a baseline to look for unusual trading activity ...
What does it mean when the relative volume is high?
High relative volume around a breakout, for example, is typically a sign that the price movement is supported by the market. The same breakout with low relative trading volume might be more suspect and traders would need to be wary of a reversal.
What does it mean when a stock is moving upward?
If a stock is marching steadily upward with increasing volume, that’s a good sign that the momentum will continue. On the other hand, declining relative volume even as the price continues to increase can be a sign of slowing momentum and an impending reversal.
Can you combine a relative volume scan with a pro scan?
Importantly, using the Pro Scanner also enables you to combine a relative volume scan with other types of scans. So, if you already have a momentum stock screener, for example, you can add relative volume into that scan to only look for momentum stocks that are trading on strong volume.
