VWMA¶
Indicators · Moving Averages
Volume-Weighted Moving Average (rolling window).
The VWMA (Volume-Weighted Moving Average) is a moving average that listens to conviction. A normal average treats every bar equally, but the VWMA weights each bar by its volume — so bars where a lot of trading happened pull the line harder than quiet bars do. The effect is a trend line that tracks where real money traded, not just where price drifted on thin activity. It reacts faster when a high-volume move hits and shrugs off low-volume noise.
How it works¶
Over a rolling window of Period bars, the VWMA sums price × volume and divides by the sum of volume in that window. Heavily-traded bars dominate the result; light bars barely register. Unlike VWAP, which accumulates from a fixed anchor (session/week), the VWMA uses a rolling window, so it behaves like a normal MA that simply respects volume. The Source defaults to close; the single output plots on the price pane in your Line color.
When to use it¶
Use the VWMA when volume is meaningful — stocks, futures, crypto — and you want your trend line to favour conviction moves over drift. A VWMA/SMA divergence is informative: when the VWMA pulls away from a plain SMA, volume is concentrating behind the move. On instruments with thin or synthetic volume (spot forex), the weighting adds little and a plain MA is just as good.
Example¶
Volume-confirmed trend: wire bars into a VWMA and a same-length SMA; treat the VWMA leading the SMA in the trend direction as conviction. Use a VWMA crossover for entries through a Crosses Above into a Buy Signal, and backtest against the SMA-only version in the Tester to see whether volume-weighting helps on your instrument.
Tips & gotchas¶
- Only as good as the volume data. On thin/synthetic-volume markets it offers little over a plain MA.
- Rolling window, not anchored. That's the key difference from VWAP — VWMA is a normal MA with volume weighting; VWAP is a cumulative fair-value line.
- VWMA vs SMA gap = conviction signal. Watch the spread between them, not just the VWMA alone.
- Spikes in volume move it sharply — a single huge-volume bar can yank the line, which is usually the point.
Related blocks¶
Inputs¶
| Socket | Type | What to wire in |
|---|---|---|
| Bars | bars |
Price bars |
Outputs¶
| Output | Type | Plots as | Description |
|---|---|---|---|
| VWMA | series |
Line | Volume-weighted rolling MA |
Parameters¶
| Parameter | Type | Default | What it does |
|---|---|---|---|
| Period | number · 2–500 | 20 |
|
| Source | choice (close, open, high, low, hl2, hlc3, ohlc4) |
close |
|
| Line color | colour | #ffab91 |
Reference auto-generated from the block catalog · category Indicators.