What it is
Raw volume is hard to compare between markets and sessions. Relative volume turns it into a ratio against the market's own recent normal, so you can see at a glance whether a candle is unusual.
On WickSpeak the bars are grey below 1, blue from 1 and gold from 1.8, with a guide line at 1. On forex and CFD charts the volume behind it is tick volume.
How it is calculated
Relative volume = this candle's volume / simple moving average of volume over the last 20 candles.
Settings
| Setting | Default | Range | What it changes |
|---|---|---|---|
| average over | 20 | 2 to 300 | How many candles make up the normal. Shorter compares with the last hour or so; longer compares with a broader normal. |
How to read it
How to trade it
- 1
On a 5 minute US30 chart, mark the range of the first 30 minutes after the New York open.
- 2
Entry trigger: a candle closes outside the range with relative volume of 1.5 or higher. Enter on the close.
- 3
Stop at the middle of the range, often 30 to 60 points on US30 at 5 minutes.
- 4
Target the range height added to the breakout level. Skip breakouts with relative volume below 1.
A close back inside the range within the next few candles cancels the breakout, even if the breakout candle had high relative volume.
On WickSpeak, relative volume writes a plain-English reading on the live candle: how busy this candle is against normal, what that says about the move, how to trade it and what would prove it wrong. In Playbook you can test: is above or below a level, crosses above or below a level, is above or below its own average, is rising, or is falling. That makes "only take breakouts when relative volume is above 1.5" a single condition in a play.
Best markets and timeframes
Most useful on 1 to 15 minute charts of US30, NAS100, gold and crypto, around session opens and news when activity changes fast.
Common mistakes
- Comparing the first candle of a session with an average that includes the quiet hours before it, which makes every open look unusual.
- Taking high relative volume as bullish without looking at the candle's direction.
- Ignoring a breakout's close; volume is a filter, not the trigger.
Works well with
Questions traders ask
What is a good relative volume?
Around 1 is normal. Many traders look for 1.5 or more on a breakout candle and treat 2 or more as unusual activity.
How is relative volume calculated?
This candle's volume divided by the average volume of the previous 20 candles (or the length you choose).
Is relative volume useful for forex?
Yes, using tick volume. It shows when a pair becomes busier than usual, such as at the London open or on news.
What is the difference between volume and relative volume?
Volume is the raw amount. Relative volume compares it with the recent average, so you can see whether the candle is unusual without knowing the market's normal numbers.