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

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…