The Volume Weighted Moving Average (VWMA) emphasizes price levels with higher trading volume. This strategy trades crossovers between price and the VWMA.
A close above VWMA after being below it generates a long entry, while a drop below VWMA prompts a short trade. Positions exit when price crosses back in the opposite direction.
Using a volume-weighted average reduces noise from low-volume periods.
- Entry Criteria: Price crosses VWMA from below or above.
- Long/Short: Both directions.
- Exit Criteria: Reverse crossover or stop.
- Stops: Yes.
- Default Values:
- VWMAPeriod = 14
- CandleType = TimeSpan.FromMinutes(5)
- Filters:
- Category: Trend
- Direction: Both
- Indicators: VWMA
- Stops: Yes
- Complexity: Basic
- Timeframe: Intraday
- Seasonality: No
- Neural Networks: No
- Divergence: No
- Risk Level: Medium