Combining Price, Volume, and Weighted Moving Averages in WEVOMO
Summary
WEVOMO is a chart indicator that combines three moving averages: one weighted by absolute close-to-close price changes, one weighted by trading volume, and a conventional linearly weighted moving average. It displays the average of the first two as VOMOMA and combines all three to produce WEVOMO. A user-selected period controls the calculation window, and separate settings determine whether each composite line is shown.
The document supplies the formulas for these components but does not explain how to interpret their crossings or levels, define a trading rule, or provide examples, backtests, or performance results. Traders would need to test whether the added price-change and volume weighting offers useful information for their market and timeframe. The indicator is presented as a calculation and display tool rather than a complete strategy.
Key ideas
- VOMOMA averages price-change-weighted and volume-weighted moving averages.
- WEVOMO combines those two averages with a linearly weighted moving average.
- Absolute changes between consecutive closing prices provide the price-change weights.
- The calculation window and visibility of the composite lines are configurable.
- The document gives no signal rules or evidence of trading performance.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.