VWMA Indicator on a Live Bitcoin Chart

What it shows

The VWMA sits on the price candles as one line. Where volume is steady it sits close to a simple average; where one candle is far bigger than the rest it leans toward that candle’s close.

How Pravex works it out

1. For each of the last N candles, multiply the source price (the close by default) by that candle’s volume.
2. Add up those products, then divide by the total volume of the same N candles. At the default length of 20 that is the last 20 candles.
3. Example numbers, not a live price: two candles closing at 100 with volume 1 and at 110 with volume 3 give (100 × 1 + 110 × 3) ÷ 4 = 107.5, where a plain average gives 105.
4. There is no point until N candles exist. The offset only moves where the finished line is drawn.

Settings

Setting	Default	What changing it does
Length	20	How many candles are averaged. A longer length is smoother and slower, and blends more volume into the weights.
Source	close	The price each candle’s volume multiplies. With hl2, a high-volume candle with a long wick drags the line toward its middle instead of its close.
Offset	0	Moves the finished VWMA right (positive) or left (negative) by that many candles. The weighting is untouched.

How traders read it

Compare the VWMA with a simple average of the same length. When the VWMA sits above it, the heavier-volume candles closed higher than the lighter ones; when it sits below, the heavy candles closed lower.

Price pulling away from the VWMA on rising volume says the move had real participation. A drift away on thin volume gets less trust, because the line barely noticed it.

When it misleads

One enormous volume candle can dominate the whole window, so the line lurches toward its close and then jumps back when that candle leaves 20 candles later. Volume here is what this exchange saw, so a quiet night session shifts the weights whatever the price is doing. On a market with no volume data the weighting has nothing to work with, which is why this page runs on bitcoin and not on spot gold.

Questions and answers

How is VWMA different from SMA?

The SMA treats every close the same. The VWMA multiplies each close by its candle’s volume before averaging, so busy candles count for more.

Why does the VWMA need volume?

The weights are the traded volumes, so without them there is nothing to weight by. Spot gold carries no exchange volume, so this page uses Hyperliquid bitcoin candles.

Why does the VWMA jump about 20 candles after a big spike?

That is the heavy candle leaving the window. While it is inside, its volume pulls the line toward its close; when it drops out, the weights rebalance at once. With the default length of 20 that happens 20 candles later.

What does it mean when the VWMA is above the SMA?

The candles that traded the most closed higher than the quiet ones in the same window. Buyers did more of their business at higher prices, at least on this exchange.

Related: Simple Moving Average, Volume, On Balance Volume, Moving Average Weighted, every indicator.