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Technical Analysis, Studies, Indicators:
VMA (Volume Moving Averages)
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Studies
A volume moving average (VMA) represents the average volume
generated over a given period of time. For example, a 9-period VMA represents
the average volume produced over the past 9 periods, including the present bar.
The two types of moving averages are:
- The Volume
Moving Average Simple (VMAs) - the average volume over a
specified number of periods;
- The
Volume Moving Average Exponential (VMAe) - applies to weighing factors to reduce
the lag in simple moving averages.
VMAs are used to observe volume changes over time and have a
smoothing effect on short-term volume spikes. A rising VMA indicates that a
larger than usual number of shares have changed hands - for whatever reason
(greedy buyers, panic sellers, etc.). Significant volume surges often precede
trend reversals on the indexes. The higher a VMA's period, the more it will tend
to smooth out volume spikes. In this way, the use of a high-period VMA will
ensure that only the larger volume surges are reflected.
Longer-term VMAs - also called slow VMAs - are used to
highlight long-term surges in volume production. If significant enough, such
volume surges often precede long-term trend reversals on an index.
Shorter-period VMAs - also called fast VMAs - are used to highlight shorter-term
volume surges; these often precede short-term trend reversals.
Below, we have listed the recommended VMA settings for
different charting periods. We recommend you use these particular VMA settings -
they have proven to be effective in signaling coming market trend reversals.
Table #1:
Recommended VMA settings
|
Period
|
SBV
VMA Period
|
Fast
VMA
|
Slow VMA |
1 bar
value |
 |
 |
 |
 |
 |
|
Intraday
Indicators |
|
2-Hour Period
|
1-20 bars |
1-20 bars |
40-100 bars |
1 minute |
|
1-Day Period |
5-30 bars |
5-30 bars |
60-100 bars |
1 minute |
Short-Term Indicators |
|
5-Day Period |
7-25 bars |
7-25 bars |
70-200 bars |
5 minutes |
|
15-Day Period |
7-25 bars |
7-25 bars |
70-200 bars |
15 minutes |
|
30-Day Period |
7-25 bars |
7-25 bars |
70-200 bars |
30 minutes |
|
60-Day Period |
7-25 bars |
7-25 bars |
70-200 bars |
1 hour |
Mid-Term Indicators |
|
3-Months Period |
3-8 bars |
3-8 bars |
40-80 bars |
1 day |
|
6-Months Period |
3-8 bars |
3-8 bars |
40-80 bars |
1 day |
|
1-Year Period |
3-8 bars |
3-8 bars |
40-80 bars |
1 day |
|
1.5-Year Period |
3-8 bars |
3-8 bars |
40-80 bars |
1 day |
|
2-Year Period |
3-8 bars |
3-8 bars |
40-80 bars |
2 days |
Long-Term Indicators |
|
3-Year Period |
3-8 bars |
3-8 bars |
40-80 bars |
3 days |
|
4-Year Period |
3-8 bars |
3-8 bars |
40-80 bars |
3 days |
|
5-Year Period |
3-8 bars |
3-8 bars |
40-80 bars |
5 days |
|
7-Year Period |
3-8 bars |
3-8 bars |
40-80 bars |
7 days |
|
10-Year Period |
3-8 bars |
3-8 bars |
40-80 bars |
10 days |
|
Weekly |
3-8 bars |
3-8 bars |
40-80 bars |
1 week |
|
Monthly |
3-8 bars |
3-8 bars |
40-80 bars |
1 month |
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