Understanding market momentum and spotting potential breakouts early is a top priority for active traders. One powerful yet often underutilized tool in this pursuit is the Relative Volume (RVOL) indicator. On platforms like Thinkorswim, integrating RVOL into your trading strategy can significantly enhance your ability to detect unusual trading activity, assess market sentiment, and time entries more effectively.
This guide walks you through everything you need to know about implementing and using the Relative Volume/RVOL indicator on Thinkorswim, including free built-in options, community-developed scripts, paid solutions, and how to interpret the data for smarter trading decisions.
What Is Relative Volume (RVOL)?
Relative Volume (RVOL) measures current trading volume against a stock’s average volume over a defined historical period—typically 10 days. By comparing today’s volume to this baseline, RVOL reveals whether trading activity is higher or lower than normal.
- An RVOL of 1.0 means current volume matches the 10-day average.
- An RVOL above 2.0 indicates double the average volume—often signaling strong interest or potential breakout activity.
- An RVOL below 0.5 suggests minimal participation, possibly reflecting consolidation or disinterest.
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This relative comparison helps filter out noise and identify stocks with unusual activity, which may precede significant price moves. Because volume often precedes price, spikes in RVOL can act as early warning signals for momentum shifts.
Built-In Option: RelativeVolumeStDev on Thinkorswim
Thinkorswim includes a native study called RelativeVolumeStDev, developed by Melvin E. Dickover. This built-in indicator calculates volume deviation from the mean and is accessible directly within the platform’s studies library—no external code required.
The indicator works by:
- Calculating the average volume over a user-defined period (default is 10 days).
- Measuring how many standard deviations today’s volume deviates from that average.
- Plotting this value on your chart as a histogram or line.
This makes it easy to visualize when volume is statistically significant. For example, a reading of +2 standard deviations suggests unusually high volume, potentially tied to news, earnings, or institutional activity.
You can access this study via the "Studies" menu under "Volatility" or by searching "RelativeVolumeStDev" in the ThinkScript editor.
Free Community Scripts: Enhanced RVOL Tools
While the built-in version is functional, many traders turn to enhanced versions created by the usethinkscript community for greater customization and clarity.
One popular thread titled "Unusual Volume Moving Average Scan" features several open-source ThinkScript variations based on Dickover’s original logic. These community scripts offer:
- Customizable lookback periods
- Color-coded alerts for high-volume spikes
- Integration with scanners and watchlists
A notable variation allows users to adjust color schemes—important because default yellow text can sometimes be hard to read on certain chart backgrounds. Some versions also include alert conditions, making them ideal for day traders monitoring multiple stocks.
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Pro Tip: When using any RVOL script, ensure consistency in time frames. Compare like with like—for example, the first hour of trading across multiple days—rather than mixing pre-market, midday, and closing volumes.
Additionally, users have shared the foundation for high RVOL scanners, enabling automated detection of stocks exhibiting abnormal volume. However, caution is advised: high volume alone doesn’t guarantee a profitable move—it must align with price action and broader market context.
Paid Solution: Premium RVOL Indicator
For those seeking a polished, support-backed solution, a premium RVOL indicator is available from scriptstotrade.com for a one-time fee. Marketed as the only dedicated RVOL tool on Thinkorswim, it claims several advanced features:
- Real-time RVOL tracking with historical comparisons
- “Last Gap Up RVOL” feature showing volume during previous gap-up sessions
- Regular updates and customer support
At the time of research, it had mostly five-star reviews praising its accuracy and ease of use. One four-star review noted a desire to view past RVOL values more clearly—suggesting room for improvement in historical data visualization.
While not essential—given the availability of free alternatives—this paid version may appeal to traders who value plug-and-play simplicity and dedicated support.
Build Your Own: Custom Coding Options
For advanced users, coding a custom RVOL indicator offers full control over functionality. Freelance platforms like Upwork have seen demand for developers to build tailored Thinkorswim scripts—some priced over $150.
Why would someone pay for a custom solution when free tools exist? Possible reasons include:
- Need for multi-timeframe RVOL analysis
- Integration with proprietary trading systems
- Specific alert logic or visual formatting preferences
Creating your own script allows integration of additional filters such as price change thresholds, sector benchmarks, or correlation with volatility indices.
If you're familiar with ThinkScript, you can modify existing open-source code or build from scratch using functions like volume, average(), and conditional plotting.
How to Use RVOL in Trading Strategies
Identifying Breakouts and Reversals
An RVOL spike coinciding with upward price movement often confirms breakout validity. For instance, a stock breaking above resistance on 3x average volume is more likely to sustain the move than one doing so on low volume.
Conversely, declining RVOL during a downtrend may signal weakening selling pressure—an early hint of reversal potential.
Confirming News Impact
Earnings reports, FDA approvals, analyst upgrades, or macroeconomic news often trigger sudden volume surges. RVOL helps quantify whether the market reaction is proportionate or overblown.
For example, if a stock gaps up 5% on an RVOL of 0.8 (below average volume), the move may lack conviction and could reverse—a phenomenon known as a "gap and crap."
Scanning for Opportunities
Use RVOL in scanner criteria to find:
- Stocks with RVOL > 2.0 during the first 30 minutes of trading
- Securities showing rising RVOL but flat price (accumulation phase)
- High-float stocks with sudden volume spikes (potential short squeezes)
FAQ: Common Questions About RVOL on Thinkorswim
Q: Can I use RVOL for swing trading?
A: Yes. Swing traders use RVOL to confirm entry points—such as buying pullbacks that occur on low volume, indicating weak selling pressure.
Q: Does RVOL work for options trading?
A: Absolutely. Unusual volume in underlying stock often precedes increased options activity, helping options traders anticipate volatility expansions.
Q: Should I rely solely on RVOL for trade decisions?
A: No. Always combine RVOL with price action, support/resistance levels, and other technical indicators for higher-probability setups.
Q: How do I avoid false signals from RVOL spikes?
A: Filter by price context. A spike during a late-day fade may be less meaningful than one during morning breakout attempts.
Q: Can RVOL be used in pre-market trading?
A: Yes, but use cautiously. Pre-market volume is thinner, so relative spikes can be misleading without proper normalization.
Final Thoughts
Whether you're a day trader hunting for momentum plays or an investor seeking confirmation of market interest, the Relative Volume (RVOL) indicator on Thinkorswim is a valuable addition to your toolkit. With free built-in studies, robust community scripts, and even premium options available, there's an implementation path for every skill level and budget.
Remember: high relative volume doesn’t guarantee success—but it does spotlight where the market’s attention lies. Combine it wisely with other tools, and you’ll be better equipped to act before the crowd.
👉 Start applying volume insights to your trading strategy today.
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