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Technicalindicators

What Is the Difference Between VWMA vs VWAP?When trading in the financial markets, having the right tools and indicators can make all the difference. Two popular indicators used by traders are VWMA and VWAP, both of which factor volume data into their calculations. But what’s the difference between the two, and which one should you consider using? In this guide, we’ll break down both indicators, show how they’re calculated, and discuss the key differences. What Is VWMA? VWMA stands for Volume-Weighted Moving Average. It’s a lagging technical indicator that’s calculated similarly to a Simple Moving Average (SMA) but taking volume into account. In essence, a high volume will have a greater impact on the VWMA, offering traders a more accurate representation of an asset’s price trend than non-volume weighted moving averages. We can see the similarities when comparing the calculation of the SMA to the VWMA. If you wanted an SMA over three periods, you’d use: 3-Period SMA = (Close 1 + Close 2 + Close 3) / 3 Close here refers to the closing price of an asset. Meanwhile, to calculate a VWMA, the formula is: 3-Period VWMA = ((Close 1 * Volume 1) + (Close 2 * Volume 2) + (Close 3 * Volume 3)) / (Volume 1 + Volume 2 + Volume 3) One advantage of VWMA is that it can filter out noise from small price movements that don't have a significant impact on trading volume. It can also help traders identify the strength of a trend by showing if price movements are accompanied by increasing or decreasing trading volume. Ultimately, traders use VWMA in much the same way as they use other moving averages. For example, they may look for the price to cross over or under the VWMA line to determine whether an asset is bullish or bearish. However, combining the SMA and VWMA indicators can be a powerful technique. A divergence between the two can be used to gauge the strength and direction of a trend. In the chart above, a bearish trend was signified by the VWMA (blue) sitting beneath the SMA (orange). As a result, the crossover signalled a change in market direction. What Is VWAP? VWAP stands for Volume-Weighted Average Price. It’s similar in principle to the VWMA, but rather than being a moving average, it shows the ratio of an asset’s price to its total trading volume in a given trading session, known as its anchor period. Consequently, it produces an average price that stays relatively static throughout a trading day, compared to a moving average, which closely follows prices. The VWAP calculation is reset at the start of each trading day. The actual steps involved are slightly more complicated: 1. Calculate the typical price from the session's first candle, using (High + Low + Close) / 3. 2. Multiply the volume of that candle by the typical price (Volume * Typical Price). 3. Calculate the sum of (Volume * Typical Price) from the first candle to the current one. 4. Calculate the sum of the volume from the first candle to the current one. 5. Divide the sum of (Volume * Typical Price) by the sum of the volume to get the VWAP. Because the VWAP is calculated using the first candle of a trading day, it’s best-used intraday on low timeframe charts, like the 1-, 5-, or 15-minute. Its value is virtually identical across all timeframes. Thankfully, traders don’t need to perform any of these calculations themselves. In the free TickTrader platform offered by us at FXOpen, you’ll find both the VWMA and VWAP indicators ready to start using within minutes. A key advantage of VWAP is that it can offer traders an idea of the "fair value" of an asset. This is in line with the idea of mean reversion, which states that prices tend to revert to their average over time. If an asset trades below its VWAP, it could be considered undervalued. Likewise, if an asset is trading above its VWAP, it could be considered overvalued, and traders may look for potential opportunities to sell the asset. However, sustained price action above or below the VWAP may also indicate a trend. Note that mean reversions and these trends aren’t mutually exclusive; an asset may soar well above the VWAP, revert back to it, and then continue much higher in a strong bull trend, like in the chart above. In this way, the VWAP can be used to effectively trade pullbacks and identify entries that align with higher timeframe trends. What Is the Difference Between VWAP and VWMA? While both VWMA and VWAP use volume data to provide a more accurate representation of an asset's price trend, several differences exist between the volume-weighted average price vs volume-weighted moving average. Calculation The first distinction is in the calculations. VWMA is an N-period moving average of the closing price, weighted by trading volume. VWAP, on the other hand, takes into account high, low, and closing prices and is anchored to a specific session and weighted by trading volume. Sensitivity Due to their differing calculations, VWMA tends to follow prices closely and is more sensitive, while VWAP is less reactive to fluctuations in both price and volume. This means that the slope of the VWMA changes more frequently, making it better suited to determining trends at-a-glance, especially when combined with other moving averages. VWAP, meanwhile, can be useful for identifying short-term deviations from the average, which may provide valuable trading opportunities based on mean reversion. Timeframe Another critical difference relates to the applicable timeframes. Like other moving averages, VWMA is timeframe agnostic, meaning the way it reacts to price changes is the same across all timeframes, whether monthly or 1-minute charts. VWAP is typically calculated using a single day’s price data, so if you try to apply VWAP to daily charts or above, it won’t indicate much at all. It’s much more effective on intraday timeframes, especially 1-hour or below. Trading Strategy Because of the differences above, trading strategies for the volume-weighted moving average vs VWAP can be quite different. VWMA can be more effective for identifying trends and may present more trading opportunities if using a short period, like 10 or 20 candles, due to its heightened sensitivity. It also has more use for swing trading or position trading strategies. VWAP is better suited to mean reversion strategies and gauging the fair value of an asset intraday. While it can be used in a trend-following approach, it may not be as effective at identifying long-term trends due to its focus on a single trading day. Instead, traders should look to identify a higher timeframe trend and then trade pullbacks to the VWAP in anticipation of trend continuation. Which One to Use Choosing between VWMA vs VWAP ultimately depends on your trading strategy and preferences. If you’re looking for a moving average that may more accurately reflect the trend of an asset, then VWMA may be a better choice. On the other hand, if you want a more static indicator that can offer mean reversion trading opportunities on intraday charts, then VWAP could be preferable. Experimenting is the best way to determine which is right for you. You can try applying both in the TickTrader terminal to see how the price responds to each across different timeframes, noting your observations. When you feel ready to put your choice into practice, you can open an FXOpen account and evaluate your strategy in live markets. Good luck! This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
Bitcoin Update - Trend Change Looks to be in the Works.Traders, Happy Memorial Day to my U.S. friends. A couple of noticeable updates on our Bitcoin chart here as a debt ceiling deal looks to have been struck. First, let's start at the bottom of our chart here. We have broken to the topside of the channel we have made and have been mostly in/under since Jan. of this year. This is bullish! Next, I mentioned in my last video, a new neckline that some technicians may have already spotted and had been utilizing. This starts the top of the green area in the chart which I am calling the neckline. This is the neckline of our larger Cup and Handle pattern and, as you know, I had been calling for a retest of this area for over two months now. Even though the touches were brief and only wicks down, they count. We have out retest. This is bullish! Third, look at that long green candle up. We closed up and created a new pivot high. This is bullish! Fourth, we broke above that black trend line. This is bullish! Fifth, if we can stay above that trend line upon close today ....This is bullish! Should the debt ceiling deal in the U.S. fall through for whatever unknown reasons, that would be bearish. Otherwise, get ready to fire up those buy orders again soon. Stew
INDEX:BTCUSDLong
by stewdamus
Support Break and Potential for Price GrowthBitcoin has breached its prior support levels within the $26,500 range, demonstrating a favorable response as it briefly touched the range spanning from $26,200 to $26,000. However, a subsequent test of this support resulted in a false break, while the previous low at $25,812 remains unbreached. As long as this critical level is upheld, there exists the potential for a positive price trajectory in Bitcoin. In the event of a shift in the current trend from this range, a substantial growth in Bitcoin's value is anticipated.
by MonoCoinSignal
41
Ethereum's Downward Trend Faces Resistance Amid Positive SignalsIn the recent 24-hour period, Ethereum has sustained its downward trend and reached the support range of $1,762 to $1,752, experiencing a 3% decrease. However, it is noteworthy that this price range has triggered a positive reaction in the market. An analysis of the Relative Strength Index (RSI) reveals a positive divergence, indicating that if the downward trend line is broken, we can anticipate a potential price increase for Ethereum within the range of $1920 to $1930. Nevertheless, it is crucial to acknowledge that the current market is characterized by substantial selling pressure, which diminishes the likelihood of a swift reversal. Additionally, we have observed the emergence of a potential twin bottom pattern in both the daily and 4-hour time frames. Confirmation of this pattern could bode well for Ethereum's medium-term conditions, offering a more favorable outlook.
by MonoCoinSignal
17
GOLD 22/05: Gold has climbed above the 1980 zone!TVC:GOLD Gold prices have rebounded above potential resistance, which has turned support, drawn from mid-month lows at $1,970 on a four-hour scale. The precious metal shows a V-shaped recovery from around 1955 amid the emergence of responsive buyers. Confident sustainability above the 20-period Exponential Moving Average (EMA) at $1,980 will turn the short-term trend positive. The Relative Strength Index (RSI) (14) briefly moved back into the 40.00-60.00 range, which indicates a bullish reversal. US Dollar Index (DXY) refreshed intraday low at 102.96 as Fed is expected to keep rate policy unchanged due to tightening credit conditions by regional banks The US is putting pressure on inflation. SELL GOLD zone 1993-1995 Stoploss: 2000 Take Profit 1: 1988 Take Profit 2: 1983 Take Profit 3: 1975
TVC:GOLDShort
by DNA_TradingFX
4
Top 4 Secrets of Using Technical Indicators Hey traders, Technical indicators are an essential part of technical analysis . With multiple different indicators on a chart, the trader aims to spot oversold/overbought conditions of the market and make a profit on that. Though, I don't consider myself to be an expert in indicators trading, here are the great tips that will help you dramatically improve your trading with them. #1️⃣ Do not overload your chart with indicators. There is a fallacy among so many traders: more indicators on the chart lead to an increase in trading performance. Following this statement, traders add dozens of technical indicators to their charts. The chart becomes not readable and messy. The trader gets lost and makes wrong trading decisions. Instead, add 1-2 indicators to your chart. That will be enough for you to make correct judgments. Do not overload your chart and try to make it clean: your task is to analyze the price action first and only then look for additional clues reading the indicators. #2️⃣ Learn what exactly the indicator shows The data derived from technical indicator must make sense to you. You must understand the logic behind its algorithm. You must know exactly what it shows to you. Confidence in your actions plays a key role in trading. During the periods of losing streaks and drawdowns, many traders drop their trading strategies. It happens because they lose their confidence. You will be able to overcome negative trading periods only by being confident in your actions. Only knowing exactly what you do, what do you rely on and why you can proceed even in dark times. #3️⃣ Use the indicators that compliment each other Many indicators are based on the same algorithms. Most of the time, the only difference between them is a minor change in its input variables. For that reason, such indicators leave very similar clues. In order to improve your trading, try to rely on indicators based on absolutely different algorithms. They must complement each other, not show you the same thing. #4️⃣ Price action first! Remember that your trading strategy must be based primarily on a price action. Trend analysis and structure analysis must go first. You must know the way to make predictions relying on a naked chart. The indicators must be applied as the confirmation signals only. They must support the trading strategy but not be its core. ❗️Remember that the indicators won't do all the work for you. Indicator is just a tool in your toolbox that must be applied properly and in strict combination with other tools. Would you add some other tips in this list? ❤️Please, support my work with like, thank you!❤️
FOREXCOM:XAUUSDEducation
by VasilyTrader
9
GOLD.18/05: Prosperity for buyersTVC:GOLD Gold (XAU/USD) prices wound up at a three-week low, raising bids to print a slight gain around $80 in the early hours of today's Asian session. In doing so, the XAU/USD bears will get some steam after falling for the past two consecutive days due to the lack of key data/events. Even so, expectations about the US being able to ease its debt limit and join the US Federal Reserve's (Fed) negotiations are putting pressure on Gold prices. Accordingly, the yellow precious metal could drop to the 50% Fibonacci retracement level of the March-May rally, around $1,950, before testing the 100-DMA support at $1,930 and the Fibonacci ratio gold, 61.8% mark, about 1,915$ In case Gold price still falls past $1915, the possibility of witnessing a drop in XAU/USD cannot be ruled out. Additionally, the Gold price rally needs to sustain beyond the bottom of the stated triangle $2000, quickly followed by a circular resistance at $2,010. Even so, the 23.6% Fibonacci retracement level and the top of the aforementioned triangle near $2,020 and $2,055 respectively will be in the spotlight. BUY GOLD 1984 - 1983 StopLoss: 1980 Take Profit 1: 1989 Take Profit 2: 1994 Take Profit 3: 2000
TVC:GOLDLong
by DNA_TradingFX
3
Analyzing Bitcoin's Market DynamicsBitcoin, the pioneering cryptocurrency, is currently undergoing an intriguing market phase as evidenced by a combination of technical indicators. The Relative Strength Index (RSI) stands at 42.60, suggesting a balanced equilibrium between buying and selling pressures. Meanwhile, the Moving Average Convergence Divergence (MACD) exhibits a bearish inclination with a value of -83, indicating a downtrend and the dominance of sellers in the market. Further analysis reveals the Stochastic Oscillators' (%K line: 23, %D line: 17) indicating that Bitcoin finds itself in a mildly oversold territory. This oversold condition could potentially lead to a market reversal or a corrective bounce, adding an element of anticipation to the current situation. Adding to the complexity of the analysis, Bitcoin's hourly Exponential Moving Average 50 (EMA 50) sits at 27,220, marking a crucial resistance level. The EMA 50 is a short-term moving average that often acts as a significant inflection point. Its current position above Bitcoin's price suggests the potential for further downward pressure. Considering the insightful additional analysis provided, the overall outlook for Bitcoin reveals an intriguing scenario. Over the last 24 hours, Bitcoin encountered resistance at the $27,226 mark, prompting the formation of a range-bound trend within a one-hour timeframe. A breakthrough below the $26,737 range implies a heightened probability of a decline towards the important support levels of $26,518 and $25,811. Nevertheless, the aforementioned support range assumes critical significance, as it presents an opportunity for a robust positive reaction. In the event of such a bounce-back, Bitcoin could regain momentum and potentially retest prior resistance levels. Consequently, a potential range channel between $27,663 (previous resistance) and $25,811 (potential support) may emerge, thereby delineating a feasible trading range for Bitcoin. This comprehensive analysis combines the insights derived from the technical indicators and the supplementary market information provided. It portrays Bitcoin's current market sentiment as cautiously bearish, highlighting the negative MACD reading and the potential breakdown of the established range. However, the resilience of the critical support range and the possibility of a subsequent upward trajectory signify the potential for a rebound and the formation of a discernible range channel. Traders and investors are advised to exercise diligence and closely monitor Bitcoin's price action, paying particular attention to the identified key levels and any potential market catalysts. Such a prudent approach will equip market participants with the necessary insights to make well-informed decisions in this intricate market environment.
by MonoCoinSignal
28
Stability, Bears, and Fibonacci MovesBitcoin (BTC) has impressively maintained a stable trading range around $26,800 for an extended duration of 48 hours, demonstrating resilience after a notable rebound from the local mid-term low of $25,800, aligned with the Fibonacci 0 level. This steady performance signifies the tenacity of bearish market forces, showcasing their considerable strength in the short term. Consequently, this robust bearish presence has the potential to drive Bitcoin's price to reach higher levels, with a promising weekly upward movement anticipated towards $28,300 (Fibonacci 0.618 level) and beyond. To further evaluate Bitcoin's future trajectory, it is crucial to examine the development of a solid mid-term breakout and a subsequent daily closing above the significant threshold of $29,000. Such a breakthrough would indicate a convincing shift in market sentiment, setting the stage for a bullish trend. In this scenario, the price of Bitcoin is likely to make substantial gains, potentially surging towards the projected target of $32,000. The presence of increased buying pressure and a positive market sentiment would likely drive this upward movement. Conversely, if Bitcoin fails to overcome the psychological resistance at $28,000, it would suggest a continuation of the prevailing cautious sentiment, with a higher probability of a retest of the $26,000 support level. In this case, the bears would maintain control over the short-term dynamics, exerting downward pressure on the price and potentially leading to a temporary downturn. Additionally, when analyzing Bitcoin's current state, it is noteworthy to consider technical indicators such as the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD). As of the latest data, Bitcoin's RSI stands at 58, indicating a relatively balanced market with neither excessive buying nor selling pressure. The MACD, on the other hand, registers a value of -27, which suggests a bearish momentum. These indicators provide valuable insights into market conditions and can be used to complement the overall analysis of Bitcoin's price movement. In conclusion, Bitcoin's recent price stability, coupled with the unwavering strength of bearish forces, sets an intriguing backdrop for traders and investors. By closely monitoring crucial levels, Fibonacci patterns, and technical indicators, market participants can gain deeper insights into the potential trajectory of Bitcoin and make informed decisions regarding investment strategies.
by MonoCoinSignal
33
GODREJPROP AT MONTHLY 40 SUPPORT #GODREJPROP down 60% from all-time highs & testing the confluence of supports! Price retesting horizontal breakout + primary trendline support since 2014. Monthly RSI @40 Support which indicates Value Buying in stock. Good For Investment Point of view. On Weekly + Monthly TF Price formed a falling wedge Patten and price also very close to upper downward trendline .After Breakout Good move can be seen in coming days. Wait for a higher high on daily before going with a full position. Price might consolidate for a few more weeks. Chart Showing perfect low Risk & High Reward Setup. Find Perfect Entry in Lower Timeframes. Positional Targets:- 1200/1355/1500+✔️
NSE:GODREJPROPLong
by Jha_Nidhi
1
BANKNIFTY - Approaching Lifetime High, Potential Rally AheadBANKNIFTY is currently trading higher and higher, having crossed multiple price hurdles and achieving its highest closing in the past week. The price is now very near to its lifetime high. If the price closes above the level of 43855 on the daily chart, we may see a rally towards positional targets of 44222, 44444, and 44888. This could be an awesome opportunity to profit from the market. The levels of 43222 and 42500 are key support levels for the price. If the price drops down towards the downside, these levels may play an important role in pushing the price towards the upside.
NSE:BANKNIFTYLong
by Jha_Nidhi
Corrective Waves?In the preceding 24-hour period, Bitcoin experienced a temporary downward fluctuation attributed to limited market volume. Presently, Bitcoin is undergoing a corrective phase within the 4-hour time frame, exhibiting an upward trajectory within the 1-hour time frame. Notably, Bitcoin's prevailing resistance levels are situated at $27,000 and $27,700. At present, Bitcoin is surpassing the $27,000 resistance, necessitating observation of its response to the second resistance level. Consequently, it is imperative to await the breach of the second resistance level before anticipating further price growth and an upward trend. Conversely, movements approaching the resistance levels should be viewed as retracements within the downward trend.
by MonoCoinSignal
46
PIDILITIND CONOLIDATION BREAKOUT SOON!!The price consolidating itself near demand zone from a very long time. Price respects the support level of 2240 and takes support & moved towards upside to the breakout level. If price breaks the levels of 2355 and closes than we can expect good upmove in coming days. #PIDILITIND📊 👉Keep in watchlist 👉Breakout Possible above 2855+ Close 👉Support At 2240 👉Good Consolidation near Demand Zone. 👉Above Breakout , Good move possible towards upside.✅🎯
NSE:PIDILITINDLong
by Jha_Nidhi
Bitcoin's Update, Fluctuations and Trend Reversal PotentialIn the past 24 hours, the market has demonstrated a combination of upward and downward fluctuations. Notably, Bitcoin has been experiencing a short-term downward trend, briefly dropping below the $26,000 threshold and finding support near $25,800. This price movement has elicited a notable positive response within the market. The support range of Bitcoin's previous range channel, which had been breached and has now transitioned into a resistance level, has temporarily impeded the cryptocurrency's short-term price growth. Nevertheless, there are indications of potential trend reversal in lower timeframes, suggesting the possibility of continued upward corrective movement towards the resistance range at $27,700. It is noteworthy that the Relative Strength Index (RSI) is currently at a level of 41, indicating a neutral stance. Additionally, the Moving Average Convergence Divergence (MACD) is at a significant level of -345. Taking these indicators into consideration, it is important to approach the market with caution. The downward trend in Bitcoin, coupled with the negative MACD reading, suggests that selling pressure may persist. However, the potential for trend reversal indicated by the RSI and the possibility of retesting the support level at $26,500 imply that there could be opportunities for upward movement. Overall, the market has experienced mixed dynamics, with Bitcoin facing a temporary setback in its short-term growth. While caution is advised due to the negative MACD reading, the RSI and the potential support retest present prospects for future price developments.
by MonoCoinSignal
12