Corrected Volume-Weighted Moving Average with Floating Trend Levels
Summary
The document explains a volume-weighted moving average, which gives more influence to prices observed when trading volume is higher. It allows either tick volume or real volume as the weighting input, then applies a correction attributed to Alexander Uhl to form a generalized double exponential moving average. Floating levels are included to help interpret trend direction.
The indicator supports several visual signal conventions: color changes can follow a slope shift, a crossing of an outer or middle floating level, or a crossing of the average itself. These are presented as possible ways to read the indicator, not as a tested trading strategy. If a broker provides no real volume, the indicator substitutes equal weights, making the result equivalent to a simple moving average; otherwise its behavior depends on the available volume series. The document supplies no parameter guidance, backtest evidence, or assessment of false signals.
Key ideas
- A volume-weighted moving average gives greater weight to prices associated with higher volume.
- The indicator can use either tick volume or real volume.
- A correction is applied to the VWMA to create a generalized double exponential moving average with floating levels.
- Color changes can mark slope shifts or crossings of the floating levels or average.
- When volume is unavailable and equal weights are used, the result becomes a simple moving average.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.