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MV Volume Indicators
Index Volume
VMA
VMA Displaced
SBV (S-B) Osc.
Selling & Buying Volume
MVO
 
AD Momentum
AD Momentum VMA
AD Mom Volume Osc
AD Mom Volume Ratio
 
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Technical Analysis, Studies, Indicators:
VMA (Volume Moving Averages)


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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:

  1. The Volume Moving Average Simple (VMAs) - the average volume over a specified number of periods;
  2. 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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1/8/2009 - SV1