Elastic Volume Weighted Moving Average (eVWMA)

eVWMA is a statistical measure using the volume to define the period of the moving average. It incorporates volume information in a natural and logical way. The eVWMA can be looked at as an approximation to the average price paid per share. The ability to "Use Average Volume" as your volume period, makes this indicator both symbol-independent and timeframe independent. This allows the use to switch both timeframe and symbol without having to change the volume period.

Presentation

evwma

Above is a 3-Minute Candlestick Chart of Dell Computer (DELL) . The blue line represents the eVWMA using the preferences seen below.

Formula

evwmaPrefs

  • Volume Period -Volume total that is used to determine the period of the moving average.
  • Use Constant Value -Use a constant number for the volume period.
  • Use __ Period Average Volume x __ -Here, you can specify a multiple of the average volume to be used as the volume period. The average volume will be computed using the bars and periodicity of the chart (simple moving average using period specified). In a daily chart, the average will be the daily average volume, if in a 3-minute chart, it will be the average volume of 3-minute bars.
  • EVWMA Color -Color, thickness, and style of the eVWMA line in the chart.
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