ProfitProgrammers

VWMA Trend Filter

Here's a simple tool for determining long term trend direction using two Volume Weighted Moving Averages ( VWMA ). The VWMA's emphasis on volume often makes it a better measurement for trend direction than the more popular Exponential Moving Average ( EMA ).

Trend direction is determined by comparing a fast and slow VWMA . The default length for the fast VWMA is 50 periods, while the slow uses a default length of 200. Both of these lengths can be modified in the input options menu. The default source for the VWMA's is HLC3((high + low + close) / 3).

If the fast VWMA is greater than the slow VWMA , then the trend is bullish and the background color is green. If the fast VWMA is less than the slow VWMA , then it is bearish and the background color is red.

We included an option to change the candle color based on whether the VWMA's indicate a bullish or bearish trend as well.

Overall, this is one of those utility tools that we like to use as an overlay over the main price chart and in conjunction with other signal generating indicators. Its purpose isn't to generate buy and sell signals, but it works well as a visual confirmation tool to help traders gauge trend direction.

-Profit Programmers
http://www.profitprogrammer.com
Skript med en öppen källkod

In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.

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