Velocity is a measure of the amount of work a Team can tackle during a single Sprint and is the key metric in Scrum. Velocity is calculated at the end of the Sprint by totaling the Points for all fully completed User Stories. The Scrum Guide does not mention velocity but we know it plays an important role in helping most Scrum Teams to keep process variance in check and to create a basis for short-term forecasting.
Points from partially-completed or incomplete stories should not be counted in calculating velocity. Velocity should be tracked throughout the Sprint on the Sprint Burndown Chart and be made visible to all Team members.
Velocity is a key feedback mechanism for the Team. It helps them measure whether process changes they make are improving their productivity or hurting it.
Using Average Velocity
Use a running average of the most recent Sprints to calculate the velocity of the next Sprint.
To get a meaningful running average velocity, one should use at least three Sprints. Teams will often run three initial Sprints to establish the team’s velocity. Velocity is empirical, you can measure it but not assuredly predict it.