Volume-Weighted MACD Using Volume-Weighted Exponential Averages
Summary
The document presents a volume-weighted variation of MACD for stock charts. It forms fast and slow averages by dividing an exponential average of price multiplied by volume by an exponential average of volume. The difference between these two volume-weighted averages is then compared with an exponential signal average; the indicator output is the difference between the MACD line and that signal line, commonly interpreted as a histogram.
The example uses fast, slow, and signal settings of 12, 26, and 9. The text claims the weighting improves accuracy for stock trading, but supplies no backtest, comparison, asset sample, or supporting evidence. Volume weighting changes how high-volume observations affect the averages; it does not by itself establish improved predictive performance. The remaining material concerns site privacy practices and adds no trading method or validation.
Key ideas
- The indicator computes fast and slow exponential averages weighted by trading volume.
- It subtracts the slow weighted average from the fast weighted average to form the MACD line.
- A signal average is calculated from that difference, and the output is the MACD line minus its signal.
- The example specifies settings of 12, 26, and 9 for the fast, slow, and signal periods.
- No empirical evidence is provided for the claim that volume weighting improves accuracy.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.