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