Volume · Indicator
Dollar volume multiplies each bar's volume by its price, showing how much money actually moved through the stock rather than how many shares did.
Overview
Dollar volume, sometimes called turnover or traded value, converts share count into cash. A bar that trades one million shares at $3 and a bar that trades one million shares at $300 look identical on a volume histogram, but the first moved three million dollars and the second moved three hundred million. For anyone sizing a position, that difference is the whole story, which is why liquidity screens are almost always written in dollars rather than shares.
It is plotted the same way as volume, as a histogram coloured by whether the bar closed above or below its open, with a moving average drawn across it for a baseline. The shape of the two indicators is usually similar over short spans, because price moves little from bar to bar. They diverge over longer spans and after large price changes: a stock that has doubled shows rising dollar volume even with flat share volume, since every share now costs twice as much to buy.
The practical use is as a liquidity filter. Institutions cannot build a position in a name that trades a few hundred thousand dollars a day without moving the price against themselves, so dollar volume sets a floor on which stocks are investable at a given size. It is also the cleaner way to compare participation across a watchlist, since two stocks at very different prices cannot be compared on share count at all.
How it is calculated
Each bar's price is multiplied by its volume. The default price is the close, which matches the convention used by most screeners and data vendors, though a typical price such as hlc3 gives a slightly better estimate of the average price paid across the bar.
The overlaid average is a simple moving average of the dollar volume column, so it lags by roughly half its length and needs that many bars before printing a first value.
Dollar Volume = Price x Volume Dollar Volume MA(n) = (DV[i] + DV[i-1] + ... + DV[i-n+1]) / n
Inputs
How to read it
Read the absolute level first, because unlike most indicators the raw number is directly meaningful. A stock averaging tens of millions of dollars a day absorbs institutional orders comfortably; one averaging a few hundred thousand does not, and any position of size in it will have to be worked carefully. Common screening floors sit somewhere between five and fifty million dollars a day depending on the size of the account.
Read the trend second. Rising dollar volume over weeks as a stock advances shows larger participants accumulating rather than a thin drift, which is the pattern growth traders look for behind a breakout. Dollar volume that falls away while price keeps rising says the move is being carried by fewer and smaller participants.
Compare it against plain volume when the two disagree. Share volume that stays flat while dollar volume climbs simply reflects a higher price, not more interest. Share volume that spikes while dollar volume barely moves is the signature of a low-priced stock where a large share count represents very little money.
Signals to look for
Comparing the moving average against a fixed dollar floor is the standard way to decide whether an instrument is tradeable at a given size. This is a filter applied before any setup is considered, not a timing signal.
A breakout accompanied by dollar volume well above its average suggests participants able to move meaningful capital were involved, which is treated as more durable than a breakout on retail-sized flow.
A sustained fall in dollar volume while a position is held warns that the exit will be harder than the entry was, particularly in smaller names where liquidity can disappear faster than price does.
Limitations
Frequently asked questions
Dollar volume multiplies each bar's volume by its price, showing how much money actually moved through the stock rather than how many shares did.
Read the absolute level first, because unlike most indicators the raw number is directly meaningful. A stock averaging tens of millions of dollars a day absorbs institutional orders comfortably; one averaging a few hundred thousand does not, and any position of size in it will have to be worked carefully. Common screening floors sit somewhere between five and fifty million dollars a day depending on the size of the account.
Liquidity threshold: Comparing the moving average against a fixed dollar floor is the standard way to decide whether an instrument is tradeable at a given size. This is a filter applied before any setup is considered, not a timing signal.
It shares every limitation of volume itself: venue-dependent reporting, distortion by index rebalancing and option expiry, and no information about direction, since every trade has a buyer and a seller.
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