Volume-Weighted Fast and Slow Moving Averages
Summary
The document describes a pair of moving averages that weight each bar’s selected price by volume. For each lookback window, it sums price multiplied by volume and divides that total by summed volume. A shorter window produces the fast line and a longer window produces the slow line; example parameter values are provided. This makes the averages more responsive to prices observed on higher-volume bars than a simple unweighted average would be.
The indicator is presented as a technical-analysis tool inspired by an earlier published concept. The document supplies a formula and an implementation for plotting both lines, but it gives no entry or exit rules, market-specific examples, backtest, or evidence that the volume weighting improves results. Traders would need to choose the price input and lookback periods for their market and evaluate the indicator independently, including how their data source defines volume.
Key ideas
- The indicator plots fast and slow averages that weight price by volume.
- Each line divides the rolling sum of price times volume by the rolling sum of volume.
- The fast and slow lookbacks are user-selected, with example lengths given in the document.
- The document specifies the calculation but does not provide trading rules or performance evidence.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.