Volume by Time

The Volume by Time indicator is a powerful tool designed to analyze how trading volume behaves at specific times throughout the day. By aggregating and averaging volume data by the time of occurrence across multiple trading sessions, this indicator helps traders identify patterns in volume behavior, spot anomalies, and better time their trades based on expected market participation. It visually overlays current volume data with historical averages, offering a clear side-by-side comparison at every bar during the trading session.

How to Trade with the Volume by Time Trading Indicator?

The core utility of the Volume by Time trading indicator lies in its ability to identify when market participants are most active during a typical trading session. As each bar prints during the day, its volume is compared to the historical average volume at that same timestamp. This comparison gives traders an edge in anticipating market moves and volatility spikes.

Each new bar's volume is automatically stored in a dataset associated with its exact time. As days progress, the indicator collects more samples at that specific time, allowing it to compute an increasingly accurate average volume level for that moment of the day.

This dataset is then visualized using a dual-layer histogram:

• Hollow bars represent the historical average volume at that specific time.
• Solid filled bars represent the current session’s volume.

[quote]

• Hollow bars = average historical volume at a given time
• Solid bars = current session volume at that time [/quote]

This visualization technique enables traders to quickly gauge whether the current market activity is above or below normal, offering crucial insight into momentum, potential breakout points, or fading trends.

You can tailor the lookback period used to generate these averages by adjusting the Length (Days) setting. Setting it to 0 will use the full available data, offering a broader historical context. Shorter durations help focus on recent market behavior, which may be more relevant in rapidly changing environments.

The indicator also displays the number of days currently used in its analysis. Keep in mind that the number may vary slightly during the session due to partial data from incomplete sessions—this is normal and expected due to varying trading schedules.

Choosing the Best Volume Analysis Mode

Another layer of customization allows traders to switch between Average and Median calculations:

• Average (Default): Smooths out short-term noise but can be influenced by outliers.
• Median: Helps mitigate the impact of unusually high or low volume spikes, offering a more robust view of typical volume behavior.

Enhancing Clarity with Bi-Directional Volume

To better understand directional participation in the market, a Bi-Directional Toggle is available. When enabled, the histogram will display upward and downward volume distinctly. This is especially useful in identifying aggressive buying vs. selling pressure at different times of day.

SETTINGS

• Analysis Type: Choose between Average or Median to control how the historical volume is calculated.
• Length (Days): Define the number of past days to include in the volume average calculation. Setting this to 0 uses the entire history.
• Bi-Directional Toggle: Turn on to separate bullish and bearish volume activity for enhanced clarity.

FAQ

What is the Volume by Time indicator used for?
This trading indicator helps traders spot high-activity times, compare current volume to historical norms, and anticipate breakout or reversal zones based on abnormal volume behavior.

How do I use the bi-directional setting?
Enable it in the settings to differentiate between upward (buy) and downward (sell) volume at each time slot—helpful in assessing market sentiment.

Can I change how volume is averaged?
Yes, the indicator allows switching between an average or median aggregation method depending on how sensitive you want the historical volume representation to be.

How to access the Volume by Time indicator?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.