I get a lot of questions about volume bars, and how to set them up. A long time ago I made myself a cheat sheet for how to set up volume bars, based on the average volume of the stock. It goes like this:
| Volume | Overview Chart |
Trading Chart |
|---|---|---|
| 10k | 144 | 55 |
| 20k | 233 | 89 |
| 30k | 377 | 144 |
| 40k-60k | 610 | 233 |
| 70k-90k | 987 | 377 |
| 100k-160k | 1597 | 610 |
| 170k-250k | 2584 | 987 |
| 260k-410k | 4181 | 1597 |
| 420k-670k | 6765 | 2584 |
| 680k-1.1M | 10946 | 4181 |
| 1.2M-1.7M | 17711 | 6765 |
| 1.8M-2.8M | 28657 | 10946 |
| 2.9M-4.6M | 46368 | 17711 |
| 4.7M-7.5M | 75025 | 28657 |
| 7.6M-12M | 121393 | 46368 |
| 12M-20M | 196418 | 75025 |
| 20M-32M | 317811 | 121393 |
With these settings, the trading chart will produce a bar about every 2 minutes or so, give or take. Obviously bars will happen faster in the morning and the afternoon. If that’s two fast or too slow for you, then shift the whole table up or down some, and start from there.
My style is typically to have a trading screen, and then a slightly higher-level reference chart. So, that’s what the two values are for. Depending on my mood, I either go for the settings for my volume range, or I go one step faster to be more aggressive, or I go one step slower to try to stay above chop.
