Thursday, March 17, 2016

Volume-Weighted Moving Average (VWMA) for Thinkorswim TOS

A Simple Moving Average (SMA) is an average of the past N closing prices. It give the same weight to every closing price.

A Volume-Weighted Moving Average (VWMA) is the same, except that it gives different weight to each closing price. The closing price of a day with high volume will have a greater weight.

e.g., if the volume of day 3 (V3) is higher, its closing price (C3) will have a larger effect.


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