Normalized Average Volume for Comparing Trading Activity
Summary
The document explains average trading volume and introduces a volume indicator that expresses current volume as a percentage of the average over a selected period. This normalization makes it easier to compare activity with a baseline rather than relying on raw volume alone. The described MetaTrader 5 version can use either tick volume or real volume, and it uses different colors to mark percentage breakouts from average volume.
The text also describes why volume can rise during price changes or company news, and why volume and liquidity matter when institutions trade large positions: low liquidity can require slower selling to limit slippage. These are general observations, not empirical results from a test of this indicator. The document does not define the breakout thresholds, color rules, averaging period, or a trading signal based on the display. Tick and real volume may also represent different measures of activity, so users need to understand which input their market provides.
Key ideas
- Average volume measures traded quantity over time and is often reported per trading day.
- The indicator expresses volume as a percentage of average volume over a chosen period.
- The MetaTrader 5 version offers tick-volume and real-volume inputs.
- Volume can increase around price changes or company news, while low liquidity can increase slippage for large trades.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.