Does Hottrend use average daily values in comparing realtime activity to historical expectations or is it more complex than that?
It is much more complex. Hottrend calculates deviations based on the specific time of day relative to expectations for that specific time in previous days. This is far more accurate than setting expectations based on average daily activity. For most liquid stocks, trading volumes typically peak in the mornings just after open and in the afternoons right before close. For example, a stock may have sizable activity in the morning, moderate activity around noon, and another bout of significant activity before market close. Since mornings are generally more active than early afternoons, the same amount of activity in the morning may not trigger a filter, whereas it might at lunchtime.
Related Questions
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