Looking for an unusual trading activity?
Webull recently added Relative Volume to the Most Active List . This new metric can help traders find stocks that are trading with unusual volume compared with past data. Make sure you have updated to the lastest app version.
1. What is relative volume?
We all know volume is crucial to stock trading. As a trader, if you are looking for an active stock or unusual volume you can check out the Relative Volume.
Relative Volume = Current Day’s Volume / Average Day’s Volume
For example, if the relative volume for 10 days (RVOL 10D) of a stock is greater than 1, it tells you that the day trading volume is higher than the average over the past 10 days. If RVOL is less than 1, it tells you this stock is trading less volatile than its average performance over the past 10 days.
Higher or lower this ratio, the more or less shares are being traded today than a typical level in the past.
If you are seeing a high RVOL, you are seeing a symbol “trading unusually”. People are watching and trading it with unusually high interest. This is when you can decide to dig deeper. Why are they doing so? Have they had any large earnings recently? Has the company shared good news?
2. What should Relative Volume mean to you?
- Liquidity
Typically, a high relative volume indicates high liquidity, which means you can liquidate a stock to realize your earned profit. Stocks with high liquidity (RVOL higher than 1 or higher) may have a low ask-bid spread, which can provide a quick exit.
- Volatility
You may need to watch closely for any symbols in your watchlist with a high RVOL. Because a high RVOL often reflects an increase in its trading activity and in turn, can reflect in its price movement changes effectively.
Note: High volatility doesn’t necessarily mean more buying—it can mean more selling, too. High relative volume never means a buy signal. It can be interpreted as a pump and dump when more sellers are liquidating these stocks, pushing its price to fall in a short time.
- Not a Standalone Indicator
RVOL is a volume indicator, and you can combine other technical indicators such as MA or chart patterns, such as triangle , to identify possible breakouts/reversal signals.
3. Where we can find Relative Volume on Webull?
You can add Relative Volume as a technical indicator on a stock chart, and customize the average days however you’d like.
You can filter a stock list by high/low relative volume ratio in our updated Most Active List . If you want to monitor this closely, save it to your watchlist.
Find any interesting symbols using Relative Volume? Let us know in the comment section below!
Note: All trading symbols displayed are for illustrative purposes only and are not intended to portray recommendations.
