# VWMA (Volume-Weighted Moving Average)

> The volume-weighted moving average is a moving average in which each session's close is weighted by that session's volume, so the line gravitates toward the prices where the most shares actually changed hands.

Canonical: https://patternsradar.com/learn/vwma

Every other average in this catalog weights by time; the VWMA weights by participation. Each close in the 20-bar window is multiplied by its volume, and the sum is divided by total volume — so a heavy 40-lakh-share session pulls the line toward its price far harder than a sleepy 4-lakh one. The result is less a trend line than a rolling estimate of the market's average transacted price over the last month.

The information is in the comparison. When the 20-day VWMA sits above the 20-day SMA, the heavy sessions happened at higher prices — volume favoured the up days, the accumulation profile. When it sits below, size traded on weakness. Traders on NSE dailies screen for price above the VWMA as evidence the crowd that actually committed money is in profit, which reads well beside delivery percentage — one infers conviction from volume, the other reports it.

Its failure mode is a single distorting session. One block deal or index-rebalancing day can carry more volume than a normal week, and the VWMA will anchor to that print for the next twenty bars regardless of what price does after. In thinly traded smallcaps, where volume arrives in lumps, the line can be mostly lump. It also says nothing about who was buying — heavy volume at a price is agreement that trade happened there, not agreement it was cheap.

The natural sibling confusion is with VWAP, which is an intraday anchor computed from the session's open, not a rolling daily average — on end-of-day data the VWMA is the analogous idea. Against the plain SMA, the divergence between the two lines is the signal; when volume is flat, they converge and the VWMA tells you nothing extra.

## In Sift

Written as `vwma(20)`. A working scan — stocks above their volume-weighted average price with most of the day's volume delivered:

```sift
where close > vwma(20) and delivery_pct > 55
```

1 of the 500 most-traded NSE stocks match today, as of 2026-08-20.

## Common questions

### What is the difference between VWMA and VWAP?

VWAP is an intraday measure — the volume-weighted average price since the open, reset each session, used as an execution benchmark. The VWMA is a rolling average across daily bars, here twenty of them. On an end-of-day screener like this one, the VWMA is the volume-weighted line that makes sense; a daily VWAP would be a single session's number.

### When is VWMA more useful than SMA?

When volume is uneven — which is when it carries information. The gap between VWMA and SMA shows whether the heavy sessions traded at higher or lower prices than the quiet ones, which is a rough accumulation-versus-distribution read. In a stock trading level volume day after day, the two lines converge and the distinction stops paying.