Volume Weighted Moving Average (VWMA) Indicator for MetaTrader 5 Download

The VWMA Indicator combines price and trading volume to identify market trends and reversals. The VWMA calculation starts by multiplying the closing price of each candlestick by the trading volume for the same period.

Then, the sum of these values is divided by the total trading volume for the specified period.

VWMA Indicator Specifications Table

The table below contains a summary of the information about this indicator:

VWMA in an Uptrend

The blue line in this indicator represents an uptrend. The chart below clearly identifies the uptrend, and the price uses the line drawn by the indicator as a dynamic support level.

These zones act as support areas, causing price reversals and upward movements.

VWMA in a Downtrend

In the price chart for the AUD/USD currency pair on a 1-hour time frame, the red line acts as a dynamic resistance level during a downtrend. When the price touches this line, it reacts and moves downward.

After entering a Sell position, traders can set their stop-loss above this resistance area.

VWMA Indicator Settings

In this image, the indicator settings are displayed in full:

• Period: Set the time frame or period (default is 20);
• Price: Reference price type used for calculation (default is a closing price);
• Volume to Use: Trading volume used (based on tick volume);
• Shift: Adjust the indicator's position;
• Theme: Background chart image.

Conclusion

The VWMA Indicator is an effective tool for identifying trends in MetaTrader 5. It offers a clear market analysis by combining price and trading volume. With volume impacting its calculations, VWMA is more sensitive to market changes.

VWMA acts as dynamic support during uptrends and dynamic resistance during downtrends.