Relative Volume, often times called RVOL, is an indicator that tells traders how current volume is compared to past trading volumes over a given period. It is kind of a like a radar for how “in-play” a stock is. The higher the relative volume is the more in play it is.
Relative Volume is displayed as a ratio. So if it is showing 3.5 relative volume, that means it is trading at 3.5 times its normal volume.
Thanks for creating this but it is incorrect. RVOL shouldn't be based on rolling average volume. It should be volume being compared to the average volume at a particular period of time. For example, your indicator will show high RVOL in the morning everyday but that is normal as all stocks have a lot of volume on the open.
MONEYMENOW
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@FaisalMahboobe3, : U r confused man.. the calculation is based on that timeframe.. If u use this on daily timeframe, it gives u the RV of that day compared to Average volume of past 14 days.. I hope u got it..
RV = CURRENT VOL/AVERAGE VOL. Therefore if you r on daily chart ====> CURRENT OR YESTERDAYS FULL DAY VOLUME/AVERAGE VOLUME OF PAST 14 DAYS,..
I will use as past 10days.. meaning 2 weeks..
FaisalMahboobe3
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@MONEYMENOW No you are incorrect. Please go through the formulas and posts listed at the end. Here is an excerpt: "...compares current volume to normal volume for the same time of day, and it’s displayed as a ratio". As you can see, it is NOT the average volume you should compare it to.
Also, think about it logically, why does the indicator ALWAYS show high RVOL in the morning? The indicator is useless as a result. Please don't take it personally. Just giving some constructive criticism.
@FaisalMahboobe3, "your indicator will show high RVOL in the morning everyday but that is normal as all stocks have a lot of volume on the open" - That's just the behavior of the stock market and the indicator shows it perfectly.
You know it's normal since you are a human being who knows market psychology, the indicator on the other hand doesn't think about psychology, it just gives you facts based on unchanged numbers...
Im sorry man but your thinking is incorrect, the indicator does exactly what it should do - show relatively high volume in the morning, because in relation to previous hours of the day there is much more volume.
Try to think about it as a crypto trader - where the markets never close
In the stock market, it will be probably better to apply this indicator to longer timeframes (>1d)