Normalized Volume: Comparing Tick Volume with Its Moving Average

Summary

The normalized volume indicator expresses current tick volume relative to its simple moving average over a configurable period. Its calculation divides volume by that average and multiplies by 100, producing a percentage-like relative volume reading. Users set the normalization period and a threshold; histogram bars are green when the reading exceeds the threshold and red otherwise.

This provides a compact way to spot volume that is elevated or subdued relative to the selected baseline. The document explains the formula and color rule but gives no example parameters, trading setup, validation, or performance evidence. Because it uses tick volume, interpretation may depend on the instrument and data feed, and the reading alone does not specify whether a trade should be entered or exited.

Key ideas

• The indicator scales tick volume against its simple moving average over a chosen period.
• Its normalized reading is volume divided by the moving average and multiplied by 100.
• A configurable threshold determines whether histogram bars are colored green or red.
• The document gives no trading rules or evidence that the indicator predicts returns.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.