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Trading and Investment Terminology

volume moving average

Volume Moving Average is the simplest volume-based technical indicator used for visual analysis of trading activity and as as a part of the more complex studies in technical analysis

Simple VMA(n) = (sum of N volume bars) / N

A Volume Moving Average (VMA) is like any simple moving average, except that it is applied to volume rather than to price data. By smoothing out individual surges in the volume activity of an index, VMAs allows you to see the general trends and volume patterns of an index.

VMAs an important tool used in volume analytics. These charts allow you to determine, whether institutional and professional traders are currently buying or selling. 

This knowledge can help you make accurate predictions about the short-, mid-, and long-term trends of the index.

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