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Definition of Volume Buzz Rate this Topic:
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nat894
Posted : Thursday, January 10, 2019 3:55:50 PM
Registered User
Joined: 11/11/2011
Posts: 3

Hello,

I'm trying to understand how Volume Buzz is calculated. Searching the forum I found this from Support:

Volume Buzz is based on the 100-Period Simple Moving Average of Volume over the previous 100 days (so not including today).

The current Volume is compared to a percentage of the average volume which is directly proportional to the percentage of the trading day which has already passed. So at 10:15 AM ET, the current volume would be compared to about 11.54% of the 100-Day Simple Moving Average of Volume ending yesterday. If the result is +25%, it would mean that current Volume is about 14.42% of the average volume instead of 11.54% of the average volume.

However, I also found this online from a Worden Workbook:

What is Volume Buzz? At any given point in the trading day, the indicator looks back over the previous 100 days and normalizes the volume at that point in the day. Then, it makes a comparison of today's volume with that norm. (E.g. At 9:45 a.m., it compares the volume of the stock at 9:45 a.m. for the last 100 days, creates a norm and then compares today's volume to that value. A value of 200% at 9:45 a.m. Indicates that the stock is experiencing more than 3x its normal volume for 9:45 a.m.)

https://www.freestockcharts.com/docs/workbook.pdf page 18.

If I read these right, they seem to be two different calculations.

The first compares the current vol with the 100sma of yesterday's vol x %age of day elapsed while the second calculates the vol of the same period of day for the last 100 days, finds the average and then compares today's current vol to that.

As we know, volume doesn't occur evenly throughout the day which method 2 takes into account but not method 1.

Am I reading this right, and if so which calculation of Volume Buzz is correct. 

Many thanks for your help.

Bruce_L
Posted : Friday, January 11, 2019 10:04:11 AM


Worden Trainer

Joined: 10/7/2004
Posts: 65,010

After doing some re-testing this morning to see if things have changed on the server since the original forum post, I can say the forum post does seem to be the correct description.



-Bruce
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nat894
Posted : Friday, January 11, 2019 11:38:56 AM
Registered User
Joined: 11/11/2011
Posts: 3

Ok thanks for your help here, so just to be clear, the first method I described in my op is the correct calculation?

Bruce_L
Posted : Friday, January 11, 2019 11:50:02 AM


Worden Trainer

Joined: 10/7/2004
Posts: 65,010

Yes, the first definition from your Thursday, January 10, 2019 3:55:50 PM ET post and provided elsewhere in the forums is the definition which matches the values which are currently returned by the program.



-Bruce
Personal Criteria Formulas
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nat894
Posted : Friday, January 11, 2019 2:25:41 PM
Registered User
Joined: 11/11/2011
Posts: 3

Ok many thanks for your help.

On a side note, the second method does seem more accurate as the first method assumes volume is even throughout the day which of course it isn't.

A suggestion would be to have another type of Vol Buzz which reflects that. I don't know how possible this is, but I think people would find it useful.

Thanks again

Nat.

Bruce_L
Posted : Friday, January 11, 2019 2:41:27 PM


Worden Trainer

Joined: 10/7/2004
Posts: 65,010

Thank you for your suggestion.



-Bruce
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