EVWMA: A Volume-Weighted Moving Average Indicator

Summary

The document introduces EVWMA, a moving average that weights price updates by trading volume. Its sole stated input is a calculation period. The described recurrence combines the prior EVWMA value, weighted by the period’s volume excluding the current volume, with the current close weighted by the volume from the start of the period; the combined value is divided by total volume over the period. In this way, volume affects how strongly a new price contributes to the indicator.

The text gives a compact formula but does not explain how to initialize the first value, handle missing or zero volume, or interpret the indicator as a trading signal. It provides no comparison with other averages, market examples, backtest results, or evidence of predictive performance. It is therefore a concise definition of an indicator calculation rather than a complete trading method. Traders would need to specify implementation details and test any signal rules on relevant data before relying on it.

Key ideas

• EVWMA is a moving average whose updates depend on trading volume.
• The calculation uses a single period input and total volume over that period.
• The prior indicator value and a close price are combined with different volume weights.
• The document does not specify initialization, signal interpretation, or empirical performance.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.