{"id":40365,"date":"2015-03-27T11:56:27","date_gmt":"2015-03-27T15:56:27","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=40365"},"modified":"2021-05-06T16:48:13","modified_gmt":"2021-05-06T20:48:13","slug":"relative-volume-rvol-defined-and-how-we-use-it","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/relative-volume-rvol-defined-and-how-we-use-it","title":{"rendered":"Relative Volume (RVOL) Defined and Used"},"content":{"rendered":"<blockquote><p>Hi Mike,<\/p>\n<p>I read One Good Trade last summer and it really turned a light on for me. Since then your weekly videos have kept me on the right path and helped me improve a little every week. I joined SMB Premium last year and then Trader90 and I\u2019m now in DNA. It was the only logical next step. Thank you for helping me grow.<\/p>\n<p>I have a question. Is Rvol (as it is used in the play book check-ups) the multiples above normal volume a stock is trading during the trade being shown? Such as an Rvol of 2 would mean the stock is trading at two times its normal volume. I can\u2019t find the answer and I\u2019m not sure if that\u2019s right. If it is right then could you have a negative Rvol?<\/p>\n<p>Thank you again and I look forward to our upcoming sessions.<\/p><\/blockquote>\n<p><strong>@MikeBellafiore<\/strong><\/p>\n<p>I put our research intern to work for an excellent definition of relative volume and my good friend Jeff White, <a href=\"http:\/\/www.thestockbandit.net\/2010\/02\/23\/relative-volume-on-demand\/\">The Stock Bandit<\/a>, had one for us&#8230;..<\/p>\n<blockquote><p><strong>Relative Volume<\/strong>.\u00a0 This compares current volume to normal volume for the same time of day, and it\u2019s displayed as a ratio.\u00a0 So for example, a stock trading 5 1\/2 times its normal volume would have a Relative Volume display of 5.5.<\/p><\/blockquote>\n<p>Thxs Jeff!<\/p>\n<p>Now how do we use relative volume?\u00a0 We use relative volume to gauge how In Play a stock is.\u00a0 When I am considering trading a stock I glance at relative volume, RV on my Level 2 as the screen grab shares below.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-40366\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2015\/03\/rv.jpg\" alt=\"rv\" width=\"594\" height=\"716\" srcset=\"\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2015\/03\/rv.jpg 594w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2015\/03\/rv-249x300.jpg 249w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2015\/03\/rv-300x362.jpg 300w\" sizes=\"auto, (max-width: 594px) 100vw, 594px\" \/><\/p>\n<p>If RVOL is\u00a0 less than 1 it is not In Play on this trading day and I may decide not to trade it.\u00a0 If RVOL is above 2 it is In Play and this is more evidence I ought to be in the name.\u00a0 When stocks are *very* In Play you can see an RVOL of 5 and above.\u00a0 The higher the RVOL the more In Play the stock is.<\/p>\n<p>I also use RVOL for position sizing.\u00a0 If RVOL is &lt;1 I may decide not to take a *very* large position in the name.\u00a0 If RVOL is &gt;3 this may give me more confidence to take a larger position as more reward and more liquidity should be present.<\/p>\n<p>I hope that helps!<\/p>\n<p>Mike Bellafiore is the Co-Founder of SMB Capital and SMBU, which provides trading education in stocks, options, forex and futures. Bella is the author of<em> One Good Trade<\/em> and <em>The PlayBook<\/em>. He welcomes your trading questions at mbellafiore@smbcap.com.<\/p>\n<p><a href=\"https:\/\/tf130.infusionsoft.com\/app\/orderForms\/SMB-DNA-of-Successful-Trading\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-40234\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2015\/03\/enrolldna.png\" alt=\"smb dna\" width=\"600\" height=\"250\" srcset=\"\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2015\/03\/enrolldna.png 600w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2015\/03\/enrolldna-300x125.png 300w\" sizes=\"auto, (max-width: 600px) 100vw, 600px\" \/><\/a><\/p>\n<p>* no relevant positions<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Hi Mike, I read One Good Trade last summer and it really turned a light on for me. Since then your weekly videos have kept me on the right path and helped me improve a little every week. I joined SMB Premium last year and then Trader90 and I\u2019m now in DNA. It was the only logical next step. Thank &#8230; <a href=\"https:\/\/www.smbtraining.com\/blog\/relative-volume-rvol-defined-and-how-we-use-it\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":40366,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[4364,956,4363,2286],"class_list":["post-40365","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general-comments-2","tag-defined","tag-relative","tag-rvol","tag-volume"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Relative Volume (RVOL) Defined and Used | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/relative-volume-rvol-defined-and-how-we-use-it\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Relative Volume (RVOL) Defined and Used | SMB Training\" \/>\n<meta property=\"og:description\" content=\"Hi Mike, I read One Good Trade last summer and it really turned a light on for me. Since then your weekly videos have kept me on the right path and helped me improve a little every week. I joined SMB Premium last year and then Trader90 and I\u2019m now in DNA. It was the only logical next step. Thank ... 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