Normalized Volume Oscillator: Comparing Volume with Its Recent Average

Summary

The normalized volume oscillator expresses current volume as a percentage deviation from a rolling average. Values below zero indicate volume below that average; positive values indicate higher activity. The displayed histogram assigns colors to ranges: below average, modestly above average, and increasingly large excesses marked by thresholds at 38.2%, 61.8%, and 100%. The accompanying indicator example uses a ten-period average and plots the normalized reading as a histogram.

The document presents the oscillator as a way to spot quieter or unusually active periods, and says it may be more useful on comparatively short timeframes, such as 15-minute charts. It is a port of an existing TradingView and MetaTrader indicator into ProRealTime, rather than a tested trading strategy. It offers no performance results or rules for entering or exiting trades. In foreign exchange, the source material also raises the question of whether price updates are a reliable proxy for actual traded volume, so the meaning of volume readings depends on the market's data source.

Key ideas

• The oscillator measures volume's percentage deviation from its recent average.
• Negative readings mark volume below average, while positive readings mark above-average volume.
• Histogram colors divide positive readings into graduated excess-volume bands.
• The example uses a ten-period average and is suggested for short chart intervals.
• The document does not provide trading rules or performance evidence, and volume data may be a proxy in some markets.

Tags

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