GlossaryIntermediate
Volume-Weighted Moving Average (VWMA)
A moving average that weights each price by the trading volume at that period, giving higher-volume periods more influence.
A Volume-Weighted Moving Average (VWMA) weights each price in its calculation window by the trading volume that occurred during that specific period, so a period with unusually high volume has more influence on the average than a low-volume period of the same price change.
This is a distinct concept from VWAP, which calculates a volume-weighted average price over a single session rather than a rolling window across many periods — see Kaavon's dedicated Volume-Weighted Moving Average article for how VWMA is actually calculated and used.
Examples
- A VWMA gives more weight to a price move that occurred on high trading volume than to one of the same size that occurred on thin volume.
- VWMA is a rolling moving average across many periods, distinct from VWAP's single-session calculation.