Volume Weighted Moving Average

Discussion in 'Technical Analysis' started by abattia, Sep 9, 2010.

  1. I am interested in investigating use of Volume Weighted Moving Average (VWMA).

    I am wondering whether crossover of a fast and slow VWMA will be a better indicator (than just SMA crossover) of how different timeframe traders/investors see value evolving over time.

    Has anyone looked at this that might be willing to share comments, observations or advice?

    One initial hurdle I see is that bars marking turning points often have high volume, but not because the extreme price has been “accepted”, but rather because the reverse auction has drawn in new traders; and this gives misleading weight (in VWMA terms) to this turning point bar. Perhaps what is needed is a modified VWMA that omits turning point bars?

    Any thoughts?
  2. Thank you for all your help.

    To those many individuals who PMed me, in particular, my inbox is now overflowing; it will obviously therefore be some time before I can respond individually to each of your messages (each of which was so packed with inportant information and insights).

    Sincerely, many thanks.