✔️ Information reviewed and updated in December 2023 by Eduardo López
The moving average is one of the most valuable indicators when determining the behavior of an asset. PWe can find different varieties of averages, such as the volume-weighted moving average, of which we will talk to you next.
➡What is volume weighted moving average? ✨
This average represents the price consensus that exists in a given period of time. In other words, it is the moving average of the prices of a period, which is very useful to know what the trend will be for said asset.
➡How can we interpret it? ✨
When in the graph we see that the moving average crosses and cuts upwards, then we will be facing an uptrend. On the contrary, if we see that the crossover cut is made downward, then we are facing a downtrend.
➡Why use it? ✨
The importance of this indicator is in the way in which the moving average integrates changes in prices with volumes. This offers us a much more accurate approximation to the price trend and its changes.