A volume weighted moving average gives busy bars more say than quiet ones. The volume weighted moving average indicator builds a 20-bar and a 50-bar VWMA from tick volume, colours the fast line green or red by its slope, and marks the bar where the fast line crosses the slow one.
This build ships as a compiled .ex4 for MT4 and .ex5 for MT5; the screenshots below come from EURUSD H1.
| Platforms | MT4 (.ex4) + MT5 (.ex5) |
|---|---|
| Chart window | Main price chart |
| Plots | 5: VWMA Up, VWMA Down, VWMA Slow, VWMA Buy, VWMA Sell |
| Alerts | popup, push notification, email, sound |
| Inputs | 9 |
On screen
Three line colours and two marks on price.
`VWMA Up` draws the fast line lime while it rises.
`VWMA Down` draws it red while it falls.
`VWMA Slow` draws gold at width 2.
`VWMA Buy` prints aqua with arrow 233.
`VWMA Sell` prints magenta with arrow 234.
- VWMA Up: line, lime, width 2
- VWMA Down: line, red, width 2
- VWMA Slow: line, gold, width 2
- VWMA Buy: arrow, aqua, width 2, arrow code 233
- VWMA Sell: arrow, magenta, width 2, arrow code 234
What happens on each bar
Weighting
Each close is multiplied by its tick volume. The sum over the window, divided by total volume, is the VWMA.
Two lines
`FastPeriod` `20` gives the coloured line and `SlowPeriod` `50` the gold one. Set the slow period to zero to compare price with the fast line instead.
Crosses
A buy prints where the fast line moves above the slow line. The sell is the mirror.
Making sense of the output
Lime segments mean the fast VWMA is rising.
Red segments mean it is falling.
Aqua marks show fast-over-slow crosses.
Magenta marks show the reverse.
`ArrowGapPts` `8` spaces the marks.
Warm-up needs about fifty bars.
Alert channels in this build: popup, push notification, email and sound, one message per closed bar.
Crosses of the two lines report once per closed bar. `EnableAlerts` controls them, and only popup delivery is on at the start.
Every Volume Weighted Moving Average Indicator input
Core settings
| Setting | What it does | Default |
|---|---|---|
FastPeriod |
Fast VWMA period. Fast VWMA length, `20`. | 20 |
SlowPeriod |
Slow VWMA period (<=0 -> price/VWMA cross). Slow VWMA length, `50`. | 50 |
Display settings
| Setting | What it does | Default |
|---|---|---|
ArrowGapPts |
Arrow offset from bar (points). Mark gap in points, `8`. | 8 |
Alert settings
| Setting | What it does | Default |
|---|---|---|
EnableAlerts |
Master alert switch, `true`. | on |
EnablePopup |
Popup, `true`. | on |
EnablePushNotify |
Phone route, `false`. | off |
EnableEmail |
Email route, `false`. | off |
EnableSound |
Speaker, `false`. | off |
SoundFile |
Speaker clip, `”alert.wav”`. | alert.wav |
Where to point it
Tick volume exists on every forex chart. On the hourly EURUSD screenshot the lines cross every few days. On M15 session volume shapes them more, and on D1 they follow weekly swings.
What can go wrong
Tick volume only approximates real volume.
Crosses lag the turn.
Quiet sessions weigh little and shift the lines slowly.
Only popup delivery starts switched on.
Copy the compiled Volume Weighted Moving Average Indicator file into your MQL4/Indicators folder, and the MT5 build into MQL5/Indicators, then restart the terminal and drag it onto a chart. The step-by-step guide with screenshots is at how to install MT4 and MT5 indicators.
Related on forexmt4systems.com: Moving Average Crossover Strategy.
Download the Volume Weighted Moving Average Indicator for MT4 and MT5
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FAQ
How is a VWMA different from a simple average?
A simple average treats every close the same. A VWMA multiplies each close by its tick volume first, so busy bars pull the line harder than quiet ones.
What happens with SlowPeriod set to 0?
The slow line is switched off, and marks compare price with the fast line instead. A close crossing above the fast VWMA then prints the buy mark.
What does the VWMA Up colour show?
That the fast line rose from the previous bar. The colour follows the slope only, while crosses with the slow gold line produce the aqua and magenta marks.
Why use FastPeriod 20 and SlowPeriod 50?
They are common trend lengths that cover about a day and a half and about two and a half days on hourly charts, giving clear, not-too-frequent crosses.
Are results guaranteed?
No. Trading involves risk. Results are not guaranteed; past performance is not indicative of future results. Use the Volume Weighted Moving Average Indicator as one input. Always backtest before trading live.
Category: this is part of our Trend collection. Browse more Trend for MetaTrader, or explore every MT4 indicator and MT5 indicator on the site.
External references
- For background on this concept, see Price-weighted index on Wikipedia.
- For broader market context, see Volatility Indices at StockCharts ChartSchool.
About the author
Written by Dominic Walsh, a Forex trader and MT4/MT5 indicator, Expert Advisor and script developer. Every tool on forexmt4systems.com is tested on live charts before release and ships with ready-to-use compiled MT4 (.ex4) and MT5 (.ex5) files. Learn more about the trader and developer behind this site.
How we build, test and correct every tool: Editorial & Testing Policy. Trading carries risk; see the disclaimer.