Trading glossary
Relative volume (RVOL)
By the PatternX team · Published
Definition
Relative volume (RVOL) compares how much a security is trading with how much it normally trades over a comparable period, expressed as a ratio. An RVOL of 3 means volume is running at three times its usual level.
How it's measured
Relative volume puts raw volume in context. The basic formula is a ratio:
RVOL = current volume ÷ average volume for a comparable period
What counts as comparable varies, and the choice changes the number a lot:
- Full-day RVOL: today's volume so far ÷ average total daily volume over a lookback period. Simple, but it reads low early in the day because the day isn't finished.
- Time-of-day RVOL: volume up to this minute ÷ average volume up to the same minute on past days. This corrects for trading being concentrated around the open and the close.
- Bar RVOL: one bar's volume ÷ the average of the previous bars, common on intraday charts.
Why it matters
Unusual volume means participation has changed. A price move on several times normal volume is generally treated as more meaningful than the same move on thin trading, because far more traders were willing to transact at the new prices. Heavy volume also usually makes it easier to get in and out, although in premarket even a high ratio can mean a small number of shares.
Example
For example, a hypothetical stock averages 2,000,000 shares a day. By 08:30 New York time it has traded 300,000 shares. Full-day RVOL is 300,000 ÷ 2,000,000 = 0.15, which looks quiet. But if the stock normally trades about 20,000 shares by that time of day, the time-of-day ratio is 15. Same activity, very different readings.
Common mistakes
- Comparing RVOL figures from tools that use different windows or adjustments.
- Reading high RVOL as bullish: heavy volume can just as easily be heavy selling.
- Ignoring the base: an RVOL of 10 on a stock that normally trades 5,000 shares a day is still thin.
How PatternX uses it
In Momentum Lab, RVOL is today's volume ÷ average daily volume. It is not time-of-day adjusted, so before the open it reads low, as in the example. It is only available with IBKR market data, and the RVOL filter is off by default. If you turn it on without IBKR data, the value is unknown, and unknown input never passes an enabled minimum. The default volume gates are a minimum premarket volume and a minimum premarket dollar volume instead.
PatternX's chart-pattern engine uses a bar-level version: a breakout bar's volume must be at least 1.2× its 20-bar average. For reading volume before the open, see relative volume in premarket.