Concept
VWMA
VWMA, also known as volume-weighted MA, is a Trend concept. The Library holds 7 implementations, each one a working definition you can pull into Quant.
Top VWMA indicators
7 total
What is a VWMA?
A VWMA (volume-weighted moving average) is a rolling average in which each bar's price is weighted by that bar's volume: over the last N bars, the sum of price times volume divided by the sum of volume. Bars that traded heavily pull the average toward their price; bars that drifted on thin volume barely move it. When volume is evenly spread, the VWMA converges on the plain SMA of the same length.
The point is to let participation, not just time, define the average price. The most common read compares the VWMA with a same-length SMA: a VWMA above the SMA says the window's heavier volume traded at higher prices, while a VWMA below says volume concentrated at lower prices. It is distinct from session VWAP, which accumulates from a fixed anchor rather than rolling a window. Volume weighting describes where business was done; it does not by itself guarantee follow-through.
How to calculate a VWMA
The VWMA is a rolling volume-weighted mean. For a lookback of N bars:
- 1Choose the lookback N and a price source (close is standard).
- 2For each of the last N bars, multiply the bar's price by the bar's volume.
- 3Sum those products and divide by the total volume over the same N bars, then roll the window forward each bar.
- 4For interpretation, plot a same-length SMA beside it: the gap between the two shows how much volume is skewing the average, and in which direction.
How traders use it
- As a volume-confirmation spread: the VWMA/SMA gap gauges whether the current move is volume-backed, widening when heavy bars lead the move and closing when it runs on thin participation.
- In crossover logic, with price/VWMA or VWMA/SMA pairs serving as a volume-aware alternative to standard MA crosses.
- As a trend filter with participation baked in: holding above a rising VWMA means price trades above the average price at which recent volume changed hands.
- To vet breakouts: a VWMA accelerating with the move supports the case that volume backed the breakout, while a flat VWMA warns the push was thin.
VWMA vs related averages
Session VWAP: VWAP accumulates price times volume from a fixed anchor, usually the session open, and resets there; it is the average price paid since the anchor. A VWMA rolls a fixed window continuously and never resets.
SMA: The SMA weights every bar equally regardless of activity. The VWMA deviates from it exactly when volume is lopsided, which is why the spread between the two is itself used as a signal.
Elastic Volume-weighted MA: The eVWMA drops the fixed window and updates in proportion to each bar's share of a chosen total volume, behaving like an EMA whose speed is set by volume. Same goal as the VWMA, different machinery.
More VWMA implementations
Related concepts · Moving-average lineage
Concept family
Trend
100 concepts mapped · 88 in the Library
VWMA FAQ
What is the difference between VWMA and VWAP?
Anchoring. VWAP starts at a fixed anchor (session open, week open, or a chosen event) and accumulates volume-weighted price from that point, resetting at the next anchor. A VWMA has no anchor: it rolls a fixed N-bar window at every bar. VWAP is a benchmark for the period since the anchor; a VWMA is a smoother that stays responsive indefinitely.
Is a VWMA better than an SMA?
Neither is strictly better. With evenly distributed volume they are nearly identical; the VWMA only adds information when volume skews toward certain bars. Many users plot both and treat the divergence between them as the actual signal, reading a rising gap as volume conviction behind the move. As with any average, the choice should be tested rather than assumed.
Does VWMA work on forex or other markets without real volume?
With caveats. Spot forex and CFD feeds typically report tick volume, the count of price updates, rather than traded size, so a VWMA there weights bars by activity rather than actual business done. Tick volume is often treated as a rough proxy, but it is a proxy. On markets that report traded size, such as equities, futures, and crypto exchanges, the volume input reflects actual business done on that venue.
Build VWMA your way.
Quant writes, tests, and refines it with you — then it runs on LuxAlgo charting or ports to TradingView.