Quick Facts
- Volume Weighted Moving Average (VWMA) is a lagging indicator.
- It’s calculated using the same formula as the Moving Average but with a higher price and a lower time period.
- Other than MA, no other indicators adjust price without using VWMA.
- Relative Volatility compares the time in minutes of high volume falling/soaring price action to get a value associated with the price movement.
- Price movement factor is increased by increasing the value a certain number of decimal to a larger whole only. Even though it works at lower decimal value.
- Price series (inflated up to 400 times by multiplied prices and denominated with original series to cancel out inflations by subtracting 1)
- One day old VWMA with 52-day price series of stock, which has to be adjusted with price data.
- Change in VWMA shows stocks trend direction, even direction gives buy/sell on its own.
- Time weights are constant but, magnitude & location within time period are varied.
- How and what factors are weighed depends on applied formula or methodology by programmers.
Unlocking the Power of Volume Weighted Alerts on TradingView
As a trader, staying on top of market trends and identifying potential trading opportunities is crucial for success. One powerful tool that can help you do just that is Volume Weighted Alerts on TradingView. In this article, we’ll dive into the world of Volume Weighted Alerts, exploring what they are, how to use them, and the benefits they can bring to your trading strategy.
What are Volume Weighted Alerts?
A Volume Weighted Alert is a customizable alert system on TradingView that allows you to set notifications based on specific volume and price conditions. These alerts can be tailored to your individual trading needs, providing real-time notifications when a particular stock, ETF, or currency pair meets your predefined criteria.
How to Set Up Volume Weighted Alerts on TradingView
Setting up Volume Weighted Alerts on TradingView is a straightforward process. Here’s a step-by-step guide to get you started:
- Create a New Alert
- Log in to your TradingView account and click on the “Alerts” tab
- Click on the “New Alert” button
- Select “Volume Weighted” as the alert type
- Define Your Criteria
- Choose the stock, ETF, or currency pair you want to track
- Set the volume and price conditions for your alert (e.g., “Volume > 10,000 and Price > $50”)
- Select the timeframe for your alert (e.g., 1 minute, 1 hour, etc.)
- Customize Your Alert
- Choose the notification type (email, pop-up, or SMS)
- Set the alert frequency (e.g., only notify me once per day)
- Add a custom message to your alert (e.g., “Buy signal on XYZ stock!”)
Benefits of Using Volume Weighted Alerts
So, why should you use Volume Weighted Alerts on TradingView? Here are just a few benefits:
- Improved Trading Efficiency
- Receive real-time notifications when a trading opportunity arises, allowing you to make informed decisions quickly
- Automate your trading process, reducing the need for manual monitoring
- Enhanced Market Insights
- Identify potential trends and patterns in real-time
- Gain a deeper understanding of market sentiment and behavior
- Reduced Emotional Trading
- Remove emotional bias from your trading decisions, allowing you to make more rational choices
- Stay disciplined and focused on your trading strategy
Real-Life Example: Using Volume Weighted Alerts to Catch a Breakout
Let’s say you’re trading a popular tech stock, XYZ Inc. You’ve set up a Volume Weighted Alert on TradingView to notify you when the stock breaks above $100 with a volume of at least 50,000 shares. On a particular day, XYZ Inc. surges to $105 with a volume of 75,000 shares, triggering your alert. You receive a notification in real-time, allowing you to take advantage of the breakout and make a potentially profitable trade.
Common Use Cases for Volume Weighted Alerts
Here are some common use cases for Volume Weighted Alerts on TradingView:
- Breakout Trading
- Identify potential breakouts above resistance levels or below support levels
- Receive notifications when a stock or ETF surges in value with high volume
- Mean Reversion Trading
- Identify potential reversals in market trends
- Receive notifications when a stock or ETF reaches a certain level with low volume
- Scalping
- Identify potential trading opportunities in short timeframes (e.g., 1-minute charts)
- Receive notifications when a stock or ETF reaches a certain level with high volume
Frequently Asked Questions:
Volume Weighted Alerts TradingView FAQ
Q: What are Volume Weighted Alerts?
Volume Weighted Alerts is a feature on TradingView that allows users to set custom alerts based on volume weighted averages. This feature provides a more accurate and reliable way to monitor market movements by taking into account the volume of trades.
Q: How do I set up Volume Weighted Alerts on TradingView?
To set up Volume Weighted Alerts on TradingView, follow these steps:
- Open your TradingView chart and click on the “Alert” button in the top right corner.
- Select “Condition” and choose “Volume Weighted” from the dropdown menu.
- Configure your alert settings, including the averaging period, source, and comparison.
- Click “Create Alert” to save your settings.
Q: What is the difference between volume weighted and simple average?
The main difference between volume weighted average and simple average is the way they calculate the average price. Volume weighted average takes into account the volume of trades, while simple average does not. This makes volume weighted average a more accurate representation of the market price.
Q: Can I use Volume Weighted Alerts with other indicators?
Yes, you can use Volume Weighted Alerts with other indicators on TradingView. To do this, follow these steps:
- Open your TradingView chart and click on the “Indicators” button in the top right corner.
- Select the indicator you want to use and configure its settings.
- Click on the “Alert” button and select “Condition” and “Volume Weighted” from the dropdown menu.
- Configure your alert settings to include the indicator.
Q: Are Volume Weighted Alerts available on all TradingView plans?
Volume Weighted Alerts are available on all TradingView plans, including the free plan. However, some features and settings may only be available on higher-tier plans.
Q: Can I backtest Volume Weighted Alerts?
Yes, you can backtest Volume Weighted Alerts on TradingView using the “Strategy Tester” feature. This feature allows you to test your alert settings on historical data to see how they would have performed.
Q: Are Volume Weighted Alerts real-time?
Yes, Volume Weighted Alerts on TradingView are real-time. This means that you will receive alerts as soon as the conditions are met, even if you are not actively watching the chart.
Q: Can I customize the volume weighted calculation?
Yes, you can customize the volume weighted calculation on TradingView by adjusting the averaging period and source. This allows you to tailor the calculation to your specific trading needs.
Q: Are Volume Weighted Alerts available on mobile devices?
Yes, Volume Weighted Alerts on TradingView are available on mobile devices. You can receive alerts on your mobile device using the TradingView app, even if you are not actively watching the chart.
Personal Summary: Unlocking the Power of Volume Weighted Alerts on TradingView
As a trader, I’ve found that the Volume Weighted Alerts (VWA) feature on TradingView has been a game-changer for my trading strategy. In this summary, I’ll share my personal experience on how to effectively use VWA to improve my trading abilities and boost profits.
Step 1: Understand the Basics of Volume Weighted Alerts
VWA is a powerful feature that helps you identify potential trading opportunities by analyzing the relationship between price and volume. It’s essential to grasp the concept of volume weighted alerts before moving forward. Essentially, VWA calculates the average price of a stock based on its trading volume, providing a more accurate picture of market sentiment.
Step 2: Set Up Your VWA Strategy
To start using VWA, I set up a custom alert by creating a condition that triggers when the stock’s volume increases above a specific threshold (e.g., 5x the normal volume). I then set the alert to send me a notification when this condition is met.
Step 3: Understand the Alert Colors
The VWA alert colors are crucial for effective trading. Green indicates a bullish signal, while red indicates a bearish signal. I use the green alert to enter long positions and red to enter short positions.
Step 4: Combine VWA with Other Indicators
To further refine my trading strategy, I combine VWA with other indicators, such as moving averages, RSI, and MACD. This helps me to validate the VWA signal and increase the accuracy of my trades.
Step 5: Trade with Confidence
With VWA, I’ve noticed an improvement in my trading confidence. The alerts provide me with a clear signal to enter or exit a trade, reducing anxiety and indecision. I’ve also seen an increase in trading profits, as VWA helps me to catch potential trends earlier and ride them more effectively.
Step 6: Monitor and Refine Your Strategy
As with any trading strategy, it’s essential to monitor and refine your VWA approach. I continuously analyze my trades, adjusting my strategy as needed to optimize performance.
Key Takeaways:
1. Understand the basics of VWA: It’s crucial to grasp the concept of volume weighted alerts before using them in your trading strategy.
2. Set up a custom alert: Tailor your VWA strategy to your specific trading goals and preferences.
3. Use the alert colors wisely: Green for long positions and red for short positions.
4. Combine VWA with other indicators: Validate the VWA signal with other market analysis tools.
5. Trade with confidence: VWA provides a clear signal to enter or exit a trade, reducing anxiety and indecision.
6. Monitor and refine your strategy: Continuously analyze your trades and adjust your VWA approach as needed to optimize performance.
