The VWMA indicator stands for Volume Weighted Moving Average. It is a type of moving average that uses not only prices but also trading volume to give more weight to prices where larger trading volumes occurred.

The difference between VWMA and SMA (Simple Moving Average):

SMA gives each period equal weight regardless of trading volume.

VWMA gives more weight to periods with higher trading volumes, making the indicator more responsive to actual market activity.

How is VWMA used in trading?

When the price is above VWMA, it may indicate a bullish trend supported by strong trading volume.

When the price is below VWMA, it may indicate a bearish trend.

Traders use it to compare actual trends against temporary fluctuations caused by low-volume movements.

Would you like to know how to calculate it or how to add it on a platform like TradingView?