# EquiVolume

Also known as: CandleVolume, Arms.
A Meta & Composition concept (Chart transforms) in the LuxAlgo Library, with 1 indicator implementation.

## What is EquiVolume?

EquiVolume is a charting style introduced by Richard W. Arms Jr. in his 1971 book Profits in Volume. Arms, also known for the Arms Index (TRIN), wanted volume moved out of a separate pane and into the price plot itself: each period is drawn as a box whose height spans the high-to-low range and whose width is proportional to the period's volume, so heavy-participation bars print wide and quiet bars print narrow. The CandleVolume variant keeps candlestick open-close bodies while borrowing the volume-scaled width.

Reading the chart is an exercise in effort versus result. A tall, wide box (Arms called it a power box) is range with participation, the signature of a move with real backing. A tall, narrow box is movement on thin trade, easier to unwind. A short, wide box is heavy volume that went nowhere, which near the edge of a move often reads as absorption and precedes some turns, though not reliably enough to trade on its own. Widths are relative to recent bars, so the same volume prints differently in different eras of the chart.

EquiVolume belongs with the [alternative bar types](https://www.luxalgo.com/library/concept/alternative-bar-types/) that re-encode the chart rather than adding an indicator. [Renko](https://www.luxalgo.com/library/concept/renko/) discards time and volume to isolate price movement; [Heikin Ashi](https://www.luxalgo.com/library/concept/heikin-ashi/) recomputes bar values to smooth the read; EquiVolume keeps every period and its prices intact but lets participation set the geometry. The cost is a distorted x-axis: horizontal distance measures traded activity, not elapsed time, so a busy session occupies more width than a quiet week, time-anchored tools plot unevenly, and the horizontal axis no longer behaves like conventional [chart scales](https://www.luxalgo.com/library/concept/chart-scales/).

EquiVolume survives as a specialist lens. Few platforms ship it natively, so it is usually reproduced with custom scripts, such as LuxAlgo's EquiVolume on TradingView, which draw volume-scaled boxes on the chart. Users consult it for specific questions, whether a breakout had participation, whether a rally is thinning, whether heavy trade at an extreme went nowhere, and keep a conventional chart alongside for session context, a version of [top-down analysis](https://www.luxalgo.com/library/concept/top-down-analysis/) across chart representations rather than timeframes.

## How to Read an EquiVolume Chart

Identification is about decoding the boxes once the chart type is applied:

1. Apply the EquiVolume chart type or script; price bars become rectangles and the separate volume pane disappears.
2. Read height as the period's high-to-low range and width as its volume relative to recent bars.
3. Scan for tall, wide power boxes: the bars where range and participation arrived together.
4. Note short, wide boxes at swing extremes: heavy trade without progress, a candidate for exhaustion.
5. Watch box widths shrink as a consolidation matures, then judge the resolution bar's width against them.
6. Remember the x-axis is activity, not time: check timestamps before assuming equal spacing means equal duration.

## How traders use it

- To qualify breakouts: a breakout printing wide boxes shows participation behind the move, while narrow boxes flag a thin push that convention reads as more failure-prone, the box-width version of checking volume at the breakout.
- To spot climactic turns: short, wide boxes after an extended run mark heavy two-sided trade with little progress, a classic exhaustion candidate that still needs price confirmation before acting.
- To watch consolidations mature: boxes that narrow as a range develops show volume drying up, useful context for judging whether a resolution attempt has fuel behind it.
- To grade trend health: impulse bars printing wide while pullbacks print narrow show participation aligned with direction; widening pullback boxes are an early warning worth cross-checking with a [trend/range classifier](https://www.luxalgo.com/library/concept/trend-range-classifiers/).
- To anchor discretionary volume reads: box geometry makes effort versus result visible at a glance, harder to ignore than a histogram at the bottom of the chart and easier to audit in hindsight.

## EquiVolume vs related concepts

- **Renko** (https://www.luxalgo.com/library/concept/renko/): Renko rebuilds the chart from fixed-size price bricks, discarding both time and volume to isolate directional movement. EquiVolume keeps every period and its true range, spending its distortion budget on encoding volume instead of filtering price.
- **Heikin Ashi** (https://www.luxalgo.com/library/concept/heikin-ashi/): Heikin Ashi recalculates bar values from averages to smooth trends, changing the prices displayed while keeping uniform widths. EquiVolume shows true prices and encodes volume in width; one edits the data, the other the geometry.
- **Alternative Bar Types** (https://www.luxalgo.com/library/concept/alternative-bar-types/): The umbrella for every re-encoded chart, from range and tick bars to point-and-figure. EquiVolume is the member that promotes volume into the drawing itself rather than resampling time or price.

## FAQ

### What is the difference between EquiVolume and CandleVolume?

Both scale bar width by volume. An EquiVolume box shows only the period's high and low, so open and close are invisible; CandleVolume keeps full candlestick anatomy, body, wicks, and color, while adding the volume-scaled width. The volume encoding is identical; the choice is about how much per-bar price detail you want: CandleVolume preserves candlestick patterns, EquiVolume strips the read down to range versus participation.

### Does EquiVolume replace volume indicators?

It replaces the visual volume pane for bar-by-bar reading, not derived measures: cumulative lines, volume averages, and delta-based tools still need their own series. Two side effects are worth knowing: the x-axis stretches with activity, so equal horizontal distances no longer mean equal time, and time-anchored tools plot oddly as a result. Many users keep a standard chart alongside for session context.

### Who invented the EquiVolume chart?

Richard W. Arms Jr., who introduced it in his 1971 book Profits in Volume. Arms spent his career pushing volume deeper into price analysis; the same agenda produced the Arms Index (TRIN) and his Ease of Movement indicator, and EquiVolume is that philosophy applied to the chart itself.

### What is a power box in EquiVolume analysis?

Arms' term for a box that is both tall and wide: large range achieved on heavy volume. It signals a move with participation behind it, which is why power boxes in the direction of a breakout or trend are read as confirmation, while their absence during a push warns the move is running on thin trade.

### Does EquiVolume work on forex and other markets without central volume?

With caveats. Spot forex has no consolidated tape, so charts use tick counts or per-venue volume as a proxy, and box widths inherit whatever that proxy misses. On equities, futures, and crypto with reliable exchange volume the geometry is more trustworthy. The reading logic is identical; the confidence it deserves is not.

### Can you use candlestick patterns on an EquiVolume chart?

Not on classic EquiVolume: boxes show only high and low, so the bodies and wicks that define candlestick patterns are invisible. CandleVolume restores open and close and keeps patterns recognizable, though volume-scaled widths change their proportions. Pattern-focused traders typically keep a standard candlestick chart alongside.

## Implementations in the Library

- EquiVolume (LuxAlgo): https://www.luxalgo.com/library/indicator/equivolume/

## Related concepts

- Renko: https://www.luxalgo.com/library/concept/renko/
- Kagi: https://www.luxalgo.com/library/concept/kagi/
- Point & Figure: https://www.luxalgo.com/library/concept/point-and-figure/
- Line Break: https://www.luxalgo.com/library/concept/line-break/
- Alternative Bar Types: https://www.luxalgo.com/library/concept/alternative-bar-types/
- Custom Indices/baskets: https://www.luxalgo.com/library/concept/custom-indices-baskets/
- Chart Scales: https://www.luxalgo.com/library/concept/chart-scales/
- Volume-adjusted Time: https://www.luxalgo.com/library/concept/volume-adjusted-time/
- Heikin Ashi: https://www.luxalgo.com/library/concept/heikin-ashi/
- Ratio/spread Charts: https://www.luxalgo.com/library/concept/ratio-spread-charts/

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Source: https://www.luxalgo.com/library/concept/equivolume/ (LuxAlgo Library, the encyclopedia of trading & technical analysis). Free to use with attribution: https://www.luxalgo.com/library/license/