What it is
Relative volume expresses current volume as a multiple of average volume for that point in the session, which makes unusual activity obvious.
How traders use it
- To build a watchlist from unusual activity
- To rank candidates by participation
- To filter out quiet names
Worked example
A small-cap trades six times its normal premarket volume on a news catalyst and moves to the top of the momentum watchlist.
Limitations
- Says nothing about direction
- Can be inflated by a single block trade
Common mistakes
- Assuming high relative volume means the move continues
Educational content only. TradeCaster does not provide financial advice and past results never imply future performance.