VAMA Volume Adjusted Moving Average

The VAMA Volume Adjusted Moving Average indicator utilizes volume increments rather than time to determine period length, offering a trend-following tool that adapts its sensitivity based on market activity.

Usage

The Usage section focuses on how market volume influences the adaptive nature of the moving average. Unlike standard moving averages that treat every bar equally, VAMA expands or contracts based on whether volume meets specific "buckets" or thresholds. This tool is primarily used to identify trend direction and potential support or resistance levels that are weighted by actual trading interest.

There are three primary methods for handling the volume calculation, which affect how the indicator renders on your chart:

• Current Mode: This is the standard live analysis mode. It calculates the average volume based on all available bars. While it plots correctly in real-time, the historical curve only updates when the script is refreshed or settings are toggled.
• Input Mode: Designed for purists following Richard Arms' original methodology. Users manually input the average volume from the on-screen label into the settings. This forces the script to recalculate and retroactively align the entire historical moving average curve.
• Subset Mode: A more dynamic, rolling-window approach. It uses a specific lookback period to determine average volume, making it more responsive to recent shifts in market activity and suitable for automated real-time plotting without manual updates.

Details

The Volume Adjusted Moving Average was developed by Richard Arms. The core concept is that price movement is only significant when validated by volume.

The calculation process involves:

1. Defining Volume Increments: The script calculates an average volume for the chart and multiplies it by a user-defined increment.
2. Volume Buckets: Price data is weighted by the ratio of actual volume to these increments.
3. Adaptive Lookback: Instead of a fixed time period (e.g., 20 days), the indicator looks back over as many bars as necessary to satisfy the "VAMA Length" volume requirement. If volume is high, the lookback period shortens; if volume is low, the period lengthens.

Because the average volume of the entire chart changes with every new bar, the "ideal" historical plot of a VAMA would technically change retroactively. This script provides multiple calculation modes to address this unique computational requirement within modern charting platforms.

Settings

General Settings

• Use Avg Vol: Selects the calculation method (Current, Input, or Subset).
• Inp Avg Vol: The manual volume value used when "Input" mode is selected.
• Subset Data: The lookback length (number of bars) used to calculate average volume in "Subset" mode.
• VAMA Length: The target number of volume ratio buckets required for the calculation.
• Volume Incr: Adjusts the size of the volume ratio buckets, affecting the sensitivity of the average.
• VAMA Source: The price input used for calculations (e.g., Close, HL2, etc.).
• VAMA Strict: When enabled, the calculation must strictly meet the volume requirements even if it requires exceeding the specified length.
• Show Avg Vol Label: Toggles the visibility of the information label on the chart.

FAQ

How do I use the "Input" mode correctly?

When the label on your chart turns red, copy the "Avg Vol" value shown on the label and paste it into the "Inp Avg Vol" field in the settings. The label will turn green, indicating the historical plot has been updated to reflect the most recent data.

Why does the moving average look different when I refresh the page?

In "Current" mode, the VAMA calculates the average volume based on the total bars loaded. Since this average changes as new bars are added, refreshing the script forces a recalculation of the entire history based on the new total average.

How can I get access to the VAMA Volume Adjusted Moving Average?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.