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EquiVolume Chart Calculation

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Black_NITE   Saturday, 01/13/18 05:53:44 AM
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EquiVolume Chart Calculation

An EquiVolume box consists of three components: price high, price low and volume. The price high forms the upper boundary, the price low forms the lower boundary and volume dictates the width. EquiVolume boxes are black when the close is above the prior close and red when the close is below the prior close.

Volume is normalized to show width relative to the look-back period. For a four month daily chart, each day's volume would be divided by total volume for the look-back period (four months). As such, the width of each box represents the day's percentage of total volume for the look-back period. Big volume days take up more space on the X axis (date). Chart 2 shows normal high-low-close bars with volume for Kraft Foods (KFT). It is a pretty normal looking chart with a normal X axis. Chart 3 shows this same four month period using EquiVolume boxes. The wide boxes show relatively high volume days, while the thin boxes show relatively low volume days. Also notice that many wide boxes can expand the entire month on the X axis. January is much wider on the EquiVolume chart than with normal high-low-close bar chart.

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