Relative Volume Thinkorswim: A Complete Guide

Relative volume Thinkorswim is a powerful tool for traders and investors. It helps identify trends and potential trading opportunities by comparing the current trading volume to the average volume over a specific period.

Thinkorswim's relative volume indicator is based on the average true range (ATR) of the stock over a 10-day period, which is a standard setting that can be adjusted to suit individual needs.

To use relative volume Thinkorswim effectively, you need to understand how it works and how to interpret the data it provides. By analyzing the relative volume, you can gain insights into market sentiment and make more informed trading decisions.

Thinkorswim is a powerful trading platform developed by TD Ameritrade.

It offers advanced trading tools and features that cater to both beginners and experienced traders.

Thinkorswim is known for its customizable charts and real-time market data.

The platform provides access to a wide range of markets, including stocks, options, futures, and forex.

Thinkorswim also offers a paperMoney account, which allows users to practice trading with virtual money.

This feature is useful for testing trading strategies and getting familiar with the platform without risking real money.

Thinkorswim's ThinkScript programming language allows users to create custom indicators and strategies.

This feature is particularly useful for advanced traders who want to create their own trading systems.

Thinkorswim's mobile app provides access to the platform's features on-the-go.

This is convenient for traders who want to stay connected to the market and make trades from anywhere.

The RVOL indicator measures the number of shares traded in a given period, comparing current volume levels to past levels to provide insight into trading activity.

High RVOL indicates heavy trading, while low RVOL indicates light trading. This can be a useful tool for identifying potential buying or selling opportunities, as well as confirming price trends.

The RVOL indicator is calculated by averaging each bar's volume over a customizable look-back period, with 10 days being the default. This average is then used to compare the current bar's volume, ranking it in relation to its own average.

If the current bar's volume is below average, it will be colored dark and appear below 100%. If it's above average by user-defined thresholds, it will get brighter and brighter, eventually turning bright red or green at extremely high readings.

Here's a breakdown of how the RVOL indicator works:

The higher the RVOL, the more liquidity day traders will be willing to take, making higher-volume stocks better traded than those with low volume.

The RVOL indicator is a valuable tool for traders, providing insight into the current market conditions by comparing current volume levels to past levels.

A high RVOL indicates that a stock is being heavily traded, while a low RVOL indicates light trading activity.

If you're a day trader, you know how important it is to have access to reliable information that can help you make quick, informed decisions.

The RVOL indicator can be displayed as a line graph, histogram, or included in the order montage or other window with data.

To use RVOL effectively, you need to be aware of the different ways it can be displayed and experiment with different settings to find what works best for you.

With practice, you'll be able to use RVOL to your advantage and make better decisions when trading stocks.

A good example of using RVOL is to look for stocks with a high relative volume ratio, which can indicate unusual price action and potential breakouts.

In order to find the relative volume of a stock, you can either calculate it yourself or subscribe to a charting service or broker who performs the calculation for you.

A reading above 1.0 means that there's more activity than usual, while a reading below 1 indicates less activity than usual.

When swing trading, many traders look for a relative volume of at least 2.5 to 1, which can be an indication that the stock is about to make a move.

Here are some key ingredients for a short squeeze: high relative volume ratio, low float stock, history as a former runner, hot sector, and high short interest.

These factors can increase the odds of a HUGE move, but nothing's guaranteed in trading.

To determine if a tradable event is occurring, you can use ThinkScript studies for Thinkorswim, which provide an easy, visual way to quickly determine if a tradable event is occurring.

By using these studies, you can automate your volume analysis and make it abundantly obvious whenever there is a trading anomaly in the works.

Calculating RVOL is relatively easy and can be done with a simple formula. The most basic way to calculate relative volume is to divide the day's volume by the average volume.

You can express this ratio as a single number, making it easy to understand and interpret. Many relative volume scanners use this method to calculate RVOL.

To calculate RVOL the hard way, you can use the intraday volume curve in your relative volume calculations. This method takes into account the volume from a specific time of day and compares it to the presumed volume based on the average.

For example, if a stock's 60-day average volume is 100,000 shares, and it trades 350,000 shares by 10:30 a.m., the relative volume would be 10 at 10:30 a.m.

RVOL is calculated by dividing the security's current volume by its 10-day average volume. This ratio can give you a good idea of whether a stock is trading above or below its historical volume averages.

A good RVOL for swing trading is at least 2.5 to 1, indicating that the number of shares traded in the stock is at least 2.5 times the average number of shares traded over the past days.

You can also use RVOL to determine what stocks are in play for day traders. If a stock doesn't have a high RVOL, it's more than likely less liquid and therefore out of play for any momentum trading strategies.

A high RVOL indicates that a stock is being heavily traded, which can be a sign of a healthy company, but it's also associated with pump and dumps.

A stock with a high relative volume is more likely to be bought and sold than a stock with a low relative volume.

Relative volume can indicate that a certain stock is more active or volatile than other stocks in the market.

A stock with a low relative volume may not be worth paying attention to, as it may indicate a lack of interest in the stock.

High relative volume can be caused by news or other catalysts that increase investor interest in a stock.

More trades mean more shares changing hands, which increases the relative volume of the stock.

A relative volume ratio of less than 1 may not be worth your time, as it indicates average volume and average moves.

Unusual volume can lead to unusual price action and potentially big moves in the market.

As a day trader, you're looking for the party, and high relative volume can help you find it.

High relative volume can be a sign of a stock that's in play and has more liquidity, which is attractive to traders.

A relative volume indicator can help you find potential trades by highlighting stocks with unusual volume.

By using relative volume, you can get a better idea of whether a stock is worth watching or not.

A good relative volume for swing trading is at least 2.5 to 1, where the number of shares traded is 2.5 times the average number of shares traded over the past few days.

This ratio can help identify potential buying or selling opportunities, as well as confirm price trends. The RVOL indicator measures the number of shares traded in a given period of time, comparing current volume levels to past levels.

A high RVOL indicates heavy trading activity, while a low RVOL indicates light trading activity. Traders often look for high relative volume to determine if a stock is in play, meaning it has the liquidity to be traded with ease.

Here are some key ingredients for a short squeeze using RVOL:

These factors can increase the odds of a huge move, but keep in mind that nothing's guaranteed in trading.

A good swing trade often involves a significant increase in relative volume, with a relative volume of at least 2.5 to 1 being a common benchmark.

This means that the number of shares traded in the stock should be at least 2.5 times the average number of shares traded over a certain period. For example, if a stock usually trades 100,000 shares a day, a sudden spike to 250,000 shares a day could be an indication that the stock is about to make a move.

Recent news events or EPS results can also play a role in determining the potential for a strong price movement. However, a high relative volume can be a valuable indicator, especially when trying to time breakouts.

In the world of penny stocks and momentum stocks, traders often look for high relative volume to determine whether a stock is in play or not. This can indicate how much size a trader can use in a trade, if any.

A good example of this is SIGA, which saw its shares trade over 37 million shares in May 2022 after news of a potential vaccine for monkey pox. This was a significant spike from its average daily trading volume of around 130,000 shares.

A high relative volume ratio is a key ingredient for a short squeeze. This can increase the odds of a huge move.

For a stock to be in play, it needs to be liquid. The more liquidity, the better. That gets more eyes on the stock and more players in the game.

A stock with a relative volume ratio of at least 2.5 to 1 is considered interesting. This means the number of shares traded in the stock is at least 2.5 times the average number of shares traded over the past days.

To use relative volume effectively, you need to consider other factors. Recent news events, EPS results, fund ownership, or other factors can all play a role.

Here are some key ingredients for a short squeeze:

A stock with a relative volume ratio of less than 1 just isn’t worth your time. You need to look for stocks with a potential for strong price movement.

Some traders use relative volume to decide which stocks they’ll watch. This can help you find potential trades that have a higher chance of success.

ThinkScript is a tool designed by TD Ameritrade for the Thinkorswim platform that can enhance trading.

You can find the relative volume of a stock by calculating it yourself or subscribing to a charting service or broker who performs the calculation for you.

The Thinkorswim Volume Profile is an indicator that can provide critical insights into an asset's price behavior by showing the prices at which volume actually occurred.

You can usually find volume information on financial websites or through your broker, and it's a measure of how much trading activity is taking place in a stock or other security.

The Volume Profile can be added to any desired timeframe to see at what price volume actually occurred, and it can be used in conjunction with price or a range of prices to provide a more complete picture of an asset's behavior.

Here's a table showing the different ways to present RVOL data:

Thinkorswim Profile is a powerful tool that helps traders and investors make informed decisions. It's a visual representation of volume activity on a chart.

The Volume Profile is a specific type of chart that shows the prices at which volume occurred, rather than the time it occurred. This is in contrast to a standard volume histogram, which shows volume activity over time.

By using the Volume Profile, traders can identify key areas of support and resistance, such as the Point of Control (POC), where the most shares traded hands. This can be a critical insight into an asset's price behavior.

The POC is the price at which the most buyers and sellers believed price was fair. It's often depicted as a red line on the chart.

ThinkScript is a tool designed for the Thinkorswim platform by TD Ameritrade. It's a sought-after tool in the stock market.

Traders always look for tools to enhance their trading, and ThinkScript is one such tool. One of its key features is that it's designed specifically for the Thinkorswim platform.

ThinkScript is a powerful tool that can be used to create custom trading strategies and indicators. It allows traders to automate their trades and stay ahead of market trends.

TD Ameritrade designed ThinkScript to meet the needs of its traders, providing them with a flexible and user-friendly platform.

To find the relative volume in thinkorswim, you'll need to select the 'Charts' tab at the top of your screen.

First, you'll want to choose the 'Studies' drop-down menu and select 'Edit Studies.' This will open a new window on your screen.

In this new window, scroll down until you see the 'Volume' category.

You can then select the 'Relative Volume' study and hit 'Apply.'