Relative Volume EMA (RVOL)

Relative Volume EMA (RVOL) measures the current bar’s volume relative to its typical volume over a selected lookback period.
It helps traders identify whether a price move is supported by real participation or if it’s occurring on weak, low-quality volume.

This version uses:

• RVOL = Current Volume ÷ Volume EMA
  
• Volume EMA Length: adjustable
  
• Signal Threshold: a customizable horizontal line (default = 1.2)
  

How to Use

1. RVOL > 1.2 → High-Quality Momentum
A value above 1.2 indicates that the current bar has at least 20% more volume than normal, suggesting:

• Strong conviction
  
• Algorithmic activity
  
• Momentum-backed breakout or breakdown
  
• Higher probability trend continuation
  

These bars are ideal for confirming entries after a technical setup (e.g., pullback, engulfing pattern, Ichimoku trend confirmation, etc.).

2. RVOL < 1.0 → Weak or Low-Quality Move

When RVOL is below 1.0:

• Volume is below average
  
• Moves are more likely to fail or reverse
  
• Breakouts are unreliable
  
• Triggers lack institutional participation
  

These bars are best avoided for trade entries.


Why This Indicator Is Useful

In many strategies, price alone is not enough.
RVOL acts as a filter to ensure that your signals occur during times when the market is actually active and committed.

Typical use cases:

• Confirm trend-following entries
  
• Validate pullbacks and breakout candles
  
• Filter out low-volume chop
  
• Identify session-based volume surges
  
• Improve risk-to-reward quality by entering only during true momentum
  

Recommended Settings

EMA Length: 20
Threshold Line: 1.2

Works well on Forex, Crypto, and Indices

Best used on 15m, 30m, 1H, and 4H charts