Written by Cory Mitchell. Updated by TraderHQ Staff.
EquiVolume Charts: Seeing Volume in Price Action
Most charts display volume as an afterthought—a separate histogram beneath the price bars. EquiVolume charts integrate volume directly into the price display, creating a visual representation where bar width tells you as much as bar height.
Developed by Richard W. Arms Jr., these charts transform abstract volume numbers into immediately visible patterns, making it easier to spot climactic moves, confirm breakouts, and identify exhaustion.
How EquiVolume Charts Work
Basic Construction
Each EquiVolume bar represents a trading period (day, hour, etc.) with:
- Height: High to low price range (vertical axis)
- Width: Relative volume for that period (horizontal axis)
- Color: Green/black if close > prior close; Red if close < prior close
Wide bars = high volume periods Narrow bars = low volume periods
Volume Width Calculation
Bar width reflects that period’s volume as a percentage of total volume over the chart’s timeframe:
Bar Width = Period Volume / Total Chart VolumeThis relative scaling means bar widths are comparable across the chart, with wider bars indicating above-average volume.
Reading EquiVolume Charts
Volume-Confirmed Breakouts
The most practical application: confirming breakouts.
Strong Breakout Signals:
- Price breaks above resistance
- EquiVolume bar is notably wider than recent bars
- Wide bar indicates institutional participation
Weak Breakout Signals:
- Price breaks through level
- Bar width is average or narrow
- Suggests lack of conviction; higher failure probability
Climactic Volume Patterns
Extremely wide bars often mark turning points:
Selling Climax (Potential Bottom):
- Downtrend culminates in very wide red bar
- Indicates panic selling exhaustion
- Often followed by reversal or consolidation
Buying Climax (Potential Top):
- Uptrend ends with very wide green bar
- Suggests final surge of buying
- Often precedes reversal as buyers exhaust
Trend Analysis
Volume patterns reveal trend health:
Healthy Uptrend:
- Up days show wider bars than down days
- Volume expands with price advances
- Pullbacks occur on narrower (lower volume) bars
Weakening Uptrend:
- Up days show narrowing bars
- Volume declining despite higher prices
- Warning sign of potential reversal
Healthy Downtrend:
- Down days show wider bars
- Selling pressure dominates volume
- Rallies occur on narrow bars
Practical Trading Applications
Breakout Confirmation Strategy
- Identify consolidation pattern (triangle, range, etc.)
- Mark breakout level
- Wait for price to break with wide EquiVolume bar
- Enter on confirmation; stop below breakout level
Skip trades where breakout occurs on narrow bars—they fail more frequently.
Climactic Reversal Strategy
- Identify extended trend (several weeks/months)
- Watch for climactic wide bar at price extreme
- Look for reversal candlestick pattern
- Enter counter-trend with stop beyond extreme
Works best at major support/resistance levels with multiple confirmation signals.
Divergence Spotting
Compare price highs/lows with volume bars:
- Bearish divergence: New price high on narrower bar than previous high
- Bullish divergence: New price low on narrower bar than previous low
Divergences suggest momentum fading before price confirms.
EquiVolume vs. Other Chart Types
| Feature | Candlestick | EquiVolume | CandleVolume |
|---|---|---|---|
| Open/Close | Yes | No | Yes |
| High/Low | Yes | Yes | Yes |
| Integrated Volume | No | Yes (width) | Yes (width) |
| Best For | Price patterns | Volume analysis | Combined analysis |
When to Use EquiVolume
Best applications:
- Confirming breakouts
- Spotting climactic reversals
- Analyzing trend health
- Swing trading timeframes
Consider alternatives when:
- Precise open/close levels matter
- Day trading (need more price detail)
- Pattern recognition relies on candlestick formations
Limitations and Considerations
What EquiVolume Charts Don’t Show
- Opening price
- Closing price
- Intraday price action within the bar
For strategies requiring these elements, use CandleVolume charts or supplement with standard candlesticks.
Volume Isn’t Everything
Wide bars don’t guarantee outcomes:
- High volume breakouts can still fail
- Climactic volume can extend, not reverse
- Volume patterns vary by market and security
Always combine EquiVolume analysis with:
- Support/resistance levels
- Trend analysis
- Other technical indicators
- Market context
Liquidity Considerations
EquiVolume works best on liquid securities where volume variations are meaningful. Thinly traded stocks show erratic bar widths that may not provide useful signals.
Charting Platform Access
EquiVolume charts are available on:
- StockCharts.com
- TradingView (as an add-on)
- TC2000
- Some broker platforms
Check your platform’s chart type options—it may be listed as “EquiVolume,” “Arms CandleVolume,” or similar.
To explore more charting and analysis platforms, see our guide to the best stock analysis websites.
Key Takeaways
EquiVolume charts provide a unique perspective by making volume visually apparent within price action. Key principles:
- Wide bars = high volume: Look for these at breakouts and potential reversals
- Narrow bars = low volume: Be cautious of breakouts on thin participation
- Climactic width often precedes reversals: Extreme volume can mark exhaustion
- Volume should confirm price: Trends are healthier when volume aligns with direction
The chart type works best as part of a broader analytical approach, providing volume confirmation for patterns and levels identified through other methods.
Experiment with EquiVolume charts on historical data to develop intuition for how volume width patterns relate to subsequent price action in your preferred markets.