Avg Volume (20-Day) is a Custom Scanner variable located in the “Stock Profile” section of Custom Search. This variable allows you to specify a range of average daily trading volume over the past 20 trading days, measured in thousands of shares (000s). Whether you’re interested in stocks with high liquidity or those with lower trading volumes, the Avg Volume (20-Day) variable helps you filter stocks based on their trading activity.
Volume is a critical factor for many traders as it provides insight into the liquidity and potential volatility of a stock. Higher average volume often indicates greater investor interest and tighter bid-ask spreads, making it easier to enter and exit positions. Conversely, lower average volume might suggest less liquidity but could also present unique trading opportunities in less-followed stocks.
In general, I won’t even consider a stock where the 20-day average daily volume is less than a million shares. Liquidity is very important when you are trying to enter and exit a trade. Stocks with low volume also tend to be choppy and lack the orderly price action I prefer. The numbers in this variable are expressed in thousands, so 1,000 equals 1,000,000 shares. By defining a volume range, you can tailor your search to find stocks that match your trading style and liquidity preferences, ensuring that you’re focusing on stocks with the right level of market participation for your strategy.
