Vama

[pbereau]

Could you also program VAMA - Volume Adjusted Moving Average created by Arms.


How do we calculate a VAMA ???

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The VAMA is calculated with each day given weight according to the volume traded, compared to the equal weighting in a Simple MA.

The weighting is normally calculated in increments of 10,000 shares. So 17,500 would have a weighting of 1 and 31,200 would have a weighting of 3.

For a detailed explanation see "Trading without Fear" by Richard Arms jr.

[pbereau]

VAMA

Volume adjusted moving averages (VAMAs) Assign the majority of weight to the day's with the most volume.

A VAMA is calculated as follows:
1. Calculate the average volume using every time period in the chart.

2. Calculate the volume increment by multiplying the average volume by 0.67

3. Calculate each period's volume ratio by dividing each period's actual volume by the volume increment.

4. Starting at the most recent time period and working backwards, multiply each period's price by the period's volume ratio and cumulatively sum these values until the user-specified number of volume increments is reached. Note that only a fraction of the last period's volume will likely be used.

[pbereau]

VAMA

The last post was from Metastock manual for VAMA.

I've asked Metastock support the exact definition.

I'm waiting for their reply.

This formula is not easy !

[eSignal_JasonK]

Please review, Guidelines for New Study Suggestions

[pbereau]

VAMA

Thanks JasonK !

I have review it...the definition should be okay.

It's just i want to be sure of it...that's why i asked again Equis team.

[pbereau]

VAMA

Equis confirmation:


Dick Arms, well-known as the developer of the Arms Index and the equivolume charting method (see Equivolume), has developed a unique method for calculating moving averages. In keeping with his prior work, the calculation method incorporates volume and is appropriately called a volume adjusted moving average .
The calculation for a volume adjusted moving average is somewhat complex; however, it is conceptually easy to understand. All moving averages (even volume adjusted) use some type of weighting scheme to "average" the data. Exponential and weighted moving averages assign the majority of weight to the most recent data. Simple moving averages assign the weight equally across all data. Variable moving averages assign the majority of the weight to the most volatile data. And as its name implies, volume adjusted moving averages assign the majority of weight to the day's with the most volume.

A volume adjusted moving average is calculated as follows:

1. Calculate the average volume using every time period in the chart.
2. Calculate the volume increment by multiplying the average volume by 0.67.
3. Calculate each period's volume ratio by dividing each period's actual volume by the volume increment.
4. Starting at the most recent time period and working backwards, multiply each period's price by the period's volume ratio and cumulatively sum these values until the user-specified number of volume increments is reached. Note that only a fraction of the last period's volume will likely be used.

[pbereau]

VAMA

From an email received from Equis today:

4. Starting at the most recent time period and working backwards,
multiply each period's price by the period's volume ratio and
cumulatively sum these values until the user-specified number of volume
increments is reached. Note that only a fraction of the last period's
volume will likely be used.

The last step, not listed, is to divide the sum by the user-specified number of volume increments