[RT] Volume weighted moving average

["Ray Raffurty" <r.raffurty@xxxxxxxx>]

Hi All Rt's,
 
I recently came accross something called " Volume 
Veighted Moving Average" described here:
 
"The simple volume weighted moving average takes a standard moving average 
and uses the daily volume as a weighting mechanism. The end effect is a moving 
average that responds to spikes or lulls in trading activity."
 
And:
 


  
  
    Volumed Weighted MACD (VWMACD)
  
    
      
    
  
    <IMG height=1 
      src="gif00214.gif" width=1>
  
    Parameters
    MA Period 1MA Period 2EMA Period
  
    Usage
    VWMACD Fast Line(Period1,Period2,EMAPeriod)VWMACD Slow 
      Line(Period1,Period2,EMAPeriod)VWMACD 
      Histogram(Period1,Period2,EMAPeriod) 
  
    <IMG height=1 
      src="gif00214.gif" width=1>
  
    Description
    The volume weighted MACD is computed in the exact same fashion as the 
      standard MACD (Moving average convergence/divergence) except the Volume 
      Weighted MACD uses volume weighted moving averages as opposed to 
      exponential moving averages. 
      To generate the signal (or fast line), the difference is computed 
      between the fast and slow moving average. The slow line is then computed 
      by taking an n-day exponential moving average of the raw signal. Finally, 
      the VWMACD Histogram is the difference between the fast and slow lines. 
      
 
 
Can anyone explain how the Volume Weighted Moving 
Average is (typically) calculated?
 
Thanks in advance.
 
Ray Raffurty






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