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February 23, 2010 at 11:01 am | | Comments 5

Relative Volume On Demand

t-iI’ve long been a user of the real-time scanner and filter Trade-Ideas Pro – since 2003.  It has a ton of features for locating stocks on the move during the trading day, which is huge for a full-time trader like me.

My favorite feature is a pretty simple one though, which is called Relative Volume.  This compares current volume to normal volume for the same time of day, and it’s displayed as a ratio.  So for example, a stock trading 5 1/2 times its normal volume would have a Relative Volume display of 5.5.

Until now, I’ve thought that to get Relative Volume readings within Trade Ideas Pro, some other specific alert would need to be triggered (new high, new low, etc.).  But today, I did something weird…I asked for help!

The CEO of Trade Ideas, Dan Mirkin, gave me the work-around for getting on-demand Relative Volume, which I want to pass along to you.  Here are the steps to take:

Open a New Alert Window from within the program.  No alert or filter settings are needed.

This window can stay minimized and just pulled up when needed.  Just right-click on it and go to Configure, and then Symbol Lists.  Select ‘Single Symbol’ and type in the stock you’re after.

ti-symb

Click ‘OK’ once done, and it’ll then display the symbol and Relative Volume for you, like this:

ti-rel-vol

I understand Trade Ideas Pro is undergoing some changes to include even more features going forward.  Should make an already great product even better!

Trade Like a Bandit!

Jeff White

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  1. as a daytrader, i have used this same feature in a program available to lightspeed traders called “schonsite”, developed by schonfeld group llc. like Trade Ideas Pro, it compares the current volume, extrapolated over the remaining time in the trading day, to either the 21 or 63day daily moving average volume.

    one problem i’ve found with this method is that the majority of the volume in a stock may be done in the first hour of the trading day. thus, if you see the stock is trading 8.0x volume at 10:00, it is very rare that it closes the trading day having done 8 times the moving average volume.

    furthermore, “market stocks” like AAPL RIMM JPM BAC POT X typically trade a high amount of volume on average and will seldom trade an “abnormal” amount of volume with the exception of news/earnings events that would put them in a filter that looks for stocks trading >2x volume. some of these stocks have been really in-play for day traders lately: aapl ipad news, steels/commodities moving >5%/day for the last few weeks

    i see the symbols you trade tend to be of the thinner variety small caps that are capable of much larger moves on the multi-day time frame and that seems to be a great niche you’ve found as a trader. i only write this to caution of the tendency i’ve seen of traders using a minimum volume factor as a necessary condition to day-trade a stock. RIMM trading -5% on the day can be a great day trading stock even if the software says it’s “only trading 1.2X volume”.

    P.S. i’ve found a new stat in schonsite that allows you to compare the last 5days’ volume in a stock to the previous 21days (month) in the volume factor form you’ve described. probably more useful for swing-trading than day-trading…

  2. Hey Jeff!

    Thanks for stopping by and sharing your thoughts. I didn’t realize Lightspeed has that tool available, that’s interesting.

    What I really like about Trade Ideas Pro and the way it calculates Relative Volume is that it takes average volume for the same time of day, and compares current volume to that. So rather than taking the current total volume as compared to the daily average total volume, it truly compares apples to apples.

    As for the stocks I tend to trade, I have a volume cutoff of about 500k shares daily for the 1-month average, so I do try to avoid the thinner names. I actually don’t trade the mega-caps much like AAPL RIMM BAC JPM, but if a great setup comes along I will hit them as well. I really like stocks above $10 which have daily average volume of 1M or greater, as they tend to offer the best liquidity.

    Again, thanks for stopping by and hope you won’t be a stranger in the future!

    Jeff

  3. Incredible article and TI is an incredible company that I use all of the time and couldn’t imagine even trying to trade without TI!

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