Trade Ideas liquidity filters: Dollar Volume vs ADV vs Volume Today (when to use each)¶
If your scans feel “random”, the lane is usually missing one thing: liquidity.
Trade Ideas gives you several ways to express liquidity. They’re related — but they are not the same. This guide explains when to use each one and how to combine them without overfitting.
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The problem these filters solve¶
You want a universe where: - the spread is reasonable - orders can fill without ridiculous slippage - alerts are “tradable”, not just technically true
That’s what liquidity constraints do.
Filter 1: Average Daily Volume (ADV)¶
What it tells you: how much a stock usually trades (shares/day), averaged over a lookback.
Use it when: - you want consistent names (not just today’s lottery ticket) - you’re building a baseline lane for recurring workflows
Downside: - ADV does not guarantee today is active.
Filter 2: Volume Today¶
What it tells you: how much has traded so far today (and often includes premarket volume).
Use it when: - you want “active today” - you’re scanning intraday and want to avoid dead tickers
Downside: - early in the session, Volume Today can be low even for good names.
Filter 3: Dollar Volume¶
What it tells you: volume expressed in dollars. It helps you compare activity across different price levels.
Why it matters: - 200k shares at $5 is not the same as 200k shares at $200
Use it when: - you want a consistent “attention” threshold regardless of price - you’re mixing price ranges and want one liquidity gate
A simple, practical combo (lane baseline)¶
Start with: - one “usual” filter: Average Daily Volume (3M) - one “today” filter: Volume Today - optional: Dollar Volume if you scan across wide price ranges
Then pair it with: - Time of Day filter - Float / short float
Where these belong in the workflow¶
Liquidity constraints should be applied early: - In Top Lists (so your candidate list isn’t junk) - In Alerts (so your “signals” are reviewable)
Start here: - Top List Window tutorial - Alert Window tutorial
FAQ¶
What’s the difference between Volume Today and Average Daily Volume?¶
ADV is the stock’s typical baseline. Volume Today is today’s activity so far. A stock can have high ADV but be dead today, or low ADV but be unusually active today.
Do I need Dollar Volume?¶
Not always. If you scan within a narrow price range, ADV + Volume Today is often enough. Dollar Volume is most helpful when scanning across a wide range of prices.
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