Average Volume displays a robust day-cumulative, specific-bar-historical, or customizable rolling periodic volume average — in either absolute (raw data) or relative (easy comparison) mode. Works across any intraday chart length and/or timeframe, with or without premarket data shown!
Each method (Day, Bar, Period and Dollar/Percent) includes display options for both absolute (plotting raw volume data and associated average) and relative (expressing the current-vs-average relationship as a ratio or percent).
• Day Cumulativecompares current total volume to historical average total volumeat the same time of day, and is perhaps the most identifiable of volume averaging approaches. This is critical in determining a fair, apples-to-apples comparison of the day’s true average volume, as commonly traders make a mistake in comparing a stock’s current volume to the end-of-day average. (ex: say it’s 11:03am — Day Cumulative displays the average volume of recent days only up to 11:03am)
Dan Zanger has popularized this as an intuitive visualization of a day’s average volume threshold, known as ‘Relative Volume’ or the Zanger Volume Ratio (although that’s a lofty namesake addition to a concept as straightforward as a ratio of historical-vs-current).
• Specific bar / bar historical is an uncommon, but valuable, method for comparing any given bar to that same bar on prior (visible) days. By comparing the current candle to other bars at the exact same time (on previous days), a trader can see what’s typical for that particular increment of time — not recent bars, but rather THAT. SPECIFIC. BAR. Hence the name! This version of the study makes it exceptionally easy to identify higher than normal commitment from traders at any time of day.
• Rolling (user-definable) periodic averages are relatively common for tracking recent fluctuations in typical volume. While this often fails to present a fair comparison (as volume commonly presents the morning-midday-afternoon ‘big-small-big’ pattern with which most traders would be familiar), it’s nevertheless important to include for traders seeking responsiveness in alerting to volume candles surpassing a recent short-term average.
• Dollar/Percentplots volume in either raw dollar form (the money transacted during a given candle) or percent-of-average-day’s-volume, a unique approach for better recognizing significant candles in context of how much of a day’s “typical” volume might encompass.
It is highly recommended that a trader apply this study on a 20 day chart length (I suggest a 5min granularity, but it works across every intraday chart length and timeframe — so go nuts!).