What Is Volume Ratio (Volume vs 20-Day Average) and What Counts as a Surge?
Today's trading volume as a multiple of the 20-day average. 1.0x is normal; above 1.5x means attention suddenly spiked (news or money moving).
Volume ratio (Vol Ratio on the card) is today's trading volume expressed as a multiple of the stock's average daily volume over the last 20 trading days. 1.0x means an ordinary day; 2.0x means twice the usual number of shares changed hands.
How it is calculated
- 20-day average volume = the sum of daily volume over the last 20 trading days, divided by 20.
- Volume ratio = today's volume divided by that 20-day average.
The 20-day window includes today, so an enormous day lifts its own denominator a little. Volume is measured in shares (or lots), not currency, so the ratio compares activity with the stock's own normal, which is what makes it comparable across a 5-dollar stock and a 500-dollar stock. One practical wrinkle: while the market is open, today's volume is still accumulating, so the ratio only settles at the close. A 0.6x reading at midday usually just means half the session is left.
Rules of thumb
| Vol Ratio | What it usually means |
|---|---|
| Below 0.7x | Quiet day; little participation |
| 0.7x to 1.3x | Normal activity |
| 1.5x and above | Volume surge; attention has spiked (news, results, index flows) |
| 3x and above | Exceptional; usually a specific event |
These bands are conventions. Volume has a natural rhythm — option-expiry days, index rebalances and results seasons all inflate it for reasons unrelated to the individual stock — so a reading is more informative when you know what day it is.
What it does not tell you
- Who is trading or why. High volume means agreement to transact, not agreement on direction. A 2x day can be heavy buying, heavy selling or a large block changing hands.
- Whether the move will continue. A surge confirms that today's price move was broadly participated in; it says nothing about tomorrow.
- Anything on its own. A 1.8x reading on a flat price day, a breakout day and a gap-down day are three completely different situations. Volume is a modifier for a price observation, not a signal by itself.
In Stock Compass
Vol Ratio is the third cell of the metric strip on the stock card, shown when the full card view is on, and is highlighted above 1.5x. In the card verdict, a ratio above 1.5 adds a neutral note to the price-momentum section: "volume is x.x times its 20-day average — attention has picked up sharply". It is deliberately neutral because heavy volume is context for the price move, not a judgement.
It is a rule indicator under Volume & Money Flow with the id vol_vs_avg20d; the default condition is vol_vs_avg20d > 1.5. Its classic role is as the confirmation leg of a breakout rule: a new 20-day high, ADX above 25, and volume above 1.5x the average — the same three conditions the published breakout templates use. The guide Turn your logic into buy rules walks through that rule with a worked example, and Moving-average alignment with a volume rule shows a second use.
FAQ
Why 20 days for the average?
Twenty trading days is roughly a calendar month — long enough to smooth out a few odd days, short enough that the normal level still reflects the stock's current situation. The same window is used for the 20-day high and 20-day return elsewhere in the app.
My stock shows 0.5x at lunchtime. Is that a quiet day?
Not necessarily. Today's volume is still accumulating during the session, so intraday readings understate the final ratio. Judge it after the close, or compare with the same time on other days.
Does a volume surge mean the price will keep moving?
No. It means many participants transacted today, which makes today's move more credible than a thin-volume drift. Whether that continues depends on what caused it — earnings, an index change and a rumour have very different follow-through.
Is a high volume ratio bullish or bearish?
Neither by itself. Combine it with the direction of the price move: a surge on a breakout day and a surge on a gap-down day are read very differently. That is why the app shows it as a neutral note.
Definition only — not investment advice.