Relative Volume

Relative volume, often shortened to RVOL, compares how much an asset is trading now with how much it normally trades. A reading of 1.0 means normal activity; 3.0 means three times normal. Raw volume numbers are hard to interpret on their own, because "2 million shares" is huge for one stock and tiny for another. Relative volume puts every asset on the same scale, showing at a glance where unusual activity is happening.

The formula#

The simplest version:

RVOL = Current volume ÷ Average volume over n days

A common average is the last 10 or 20 days.

Adjusting for time of day#

During the trading session, comparing partial day volume with a full day average is misleading. At 10:00 a.m., a stock will always look like it has low volume compared with a whole day. The better approach compares volume so far today with the average volume up to the same time on previous days.

Intraday RVOL = Volume so far today ÷ Average volume by this time over n days

Many trading platforms calculate time adjusted relative volume automatically.

What RVOL tells you#

How traders use relative volume#

Finding stocks in play#

Day traders scan for stocks with high RVOL at the open, often combined with a gap and a news catalyst. High relative volume means more participants, tighter spreads and larger moves, all useful for short term trading. See Day Trading and News Trading.

Confirming breakouts#

A breakout with RVOL above 1.5 to 2.0 has much better odds of follow through than one on below average volume. See Breakouts.

Spotting quiet pullbacks#

Low relative volume during a pullback in an uptrend suggests weak selling pressure. See Volume Analysis Basics.

Avoiding dead markets#

Stocks with very low relative volume often move little and have wider spreads, which can be poor for active trading.

Limitations#

• Events distort averages: an earnings day or index rebalance inflates the average for weeks afterwards, making later days look quiet.
• Spikes are not direction: high RVOL can accompany sharp falls as well as rises.
• Small caps: very high RVOL in thinly traded stocks can come from a handful of trades or promotional activity.

Relative volume in crypto and futures#

The same idea works in any market with reliable volume. In futures, compare volume with the same session time on previous days, remembering that volume shifts between contract months around rolls. In crypto, which trades all day, compare each hour's volume with the average for that hour, because activity rises when US and European traders are both awake.

Common mistakes#

• Comparing partial day volume with full day averages.
• Treating high RVOL as bullish without looking at price direction.
• Ignoring why volume is high; check the news.

Frequently asked questions#

What is relative volume?#

A comparison of current volume with an asset's normal volume, usually expressed as a ratio, where 1.0 means normal.

What is a good relative volume for day trading?#

Many day traders look for RVOL of 2 or higher, often with a news catalyst, to find stocks with strong participation.

How do you calculate relative volume during the day?#

Divide volume traded so far today by the average volume traded by the same time of day over recent sessions.

Next, learn what it means when price and volume disagree in Volume Divergence.