⚙️ BUILT-IN
Volume Weighted Moving Average (VWMA)
A moving average that weights each bar's price by its traded volume, so heavy-volume bars influence the average more than light-volume bars over the same lookback period.
190KUses
10900Likes
0Comments
Live Demo — Volume Weighted Moving Average (VWMA) applied to NIFTY 50 (illustrative)
PriceEMA(9)EMA(21)SMA(20)
What is VWMA?
VWMA factors traded volume into the weighting scheme instead of just recency. Bars with heavier volume pull the average toward their price more strongly, making VWMA a simple way to gauge whether a price move is backed by real participation.
Formula
VWMA = Sum(Price_i * Volume_i, n) / Sum(Volume_i, n)Parameters
| Parameter | Default | Description |
|---|---|---|
| Period (n) | 20 | Number of bars in the lookback window |
| Source | Close | Price field used |
Signal Interpretation
- Price crossing VWMA carries more weight than a plain MA cross since VWMA reflects volume-backed levels.
- A VWMA diverging from a same-period SMA suggests recent action driven by unusually high/low volume bars.
- VWMA sloping up while volume climbs confirms genuine buying pressure.
- If price trends but VWMA lags, the move may lack follow-through.
- Fast/slow VWMA crossovers work as a volume-confirmed alternative to standard crossovers.
Tips & Best Practices
- Most useful on instruments with reliable, non-erratic volume data.
- Compare VWMA against a plain SMA/EMA of the same period.
- Combine with VWAP for intraday context; VWMA gives a rolling volume-weighted trend across any period.