What is RVOL (Relative Volume)?
Current volume vs an N-period baseline — distinguishes "real" moves from thin-flow noise.
Definition
Relative volume = current period volume ÷ average volume of the same period over the last N days. RVOL = 2.0 means today is trading at twice the typical pace; RVOL = 0.4 means thin participation. Useful at every horizon (1m bar, 1h, daily).
Why it matters for trading
- High RVOL on a breakout = participation is confirming. Low RVOL on a breakout = liquidity grab; reversal probability rises sharply.
- RVOL sets the reliability of every other signal. A 2-sigma move on RVOL 0.3 has roughly half the predictive value of the same move on RVOL 1.5.
- Cross-asset RVOL spikes (multiple instruments simultaneously) signal regime-level events worth elevating to Tier 1 / kill-switch consideration.