VWMA

Volume Weighted Moving Average

Click here to read about Moving Averages.

Similar to the Simple Moving Average. The way in which the VWMA differs, is that the present price(s) are weighted depending on the volume trading in that period. The key concept behind the VWMA is that the moving average is given more weight in times when there is a larger amount of trading activity.

Parameters: Period & Offset.

For additional help on what the different parameters mean, that isn't included on this page, click here.

Volume Weighted Moving Average

Here is an example of an Volume Weighted Moving Average chart study (on a London Stock Exchange graph)

Reading the study:

Trade the same way as with the SMA. When the VWMA crosses from above the price line its a good time to buy, while when it crosses from below it is a good time to sell.

VWMA Crossings

Here is an example of a VWMA crossing the price line (of the London Stock Exchange), and what it may indicate