Equivolume Charting

According to Richard Arms, “If the market wore a wristwatch, it would be divided into shares not hours.” Arms epitomizes those thoughts with equivolume charts. He sought a way to incorporate important volume information into the price chart. The result was equivolume charts, which graphically depict volume’s impact on the price bar chart. This is accomplished by plotting price’s height as normal via the vertical y-axis. However, the horizontal x-axis plot is based on volume. Essentially, this charting method replaces time with volume.

Equivolume charts expand the width of the price bar according to the relative volume in a given trading day. The price bar’s width is created by comparing the volume of the bar to the normalized volume of the range. This process produces price bars with various widths according to their volume. Wide bars show strong volume, whereas thin bars show weak volume.