Here in this version; Exponential Moving Averages used and Weighted by instead of using only ( Weighted Moving Averages).
I personally asked Mr Dormeier, the developer of this indicator, and he confirmed this second version could be used.
I personally think that this one is more effective when comparing with the version...
Weighted (VW-MACD) was created by Buff Dormeier and described in his book Investing With Analysis. It represents the convergence and divergence of volume-weighted price trends.
The inclusion of allows the VW-MACD to be generally more responsive and reliable than the traditional .
What is (Moving Average Convergence Divergence)?
Moving Average Convergence Divergence was created by Gerald Appel in 1979. Standard plots the difference between a short term exponential average and a long term exponential average. When the difference (the line) is positive and rising, it suggests prices trend is up. When the line is negative, it suggests prices trend is down.
A smooth exponential average of this difference is calculated to form the signal line. When the line is above the signal line, it illustrates that the momentum of is rising. Likewise, when the is below the signal line, the momentum of the falls. This difference between the line and the signal line is frequently plotted as a histogram to highlight the spread between the two lines.
What is the difference between and VW-MACD?
Weighted is substituting the two exponential moving averages to compute the difference with the two corresponding . Thus, VW-MACD contrasts a volume-weighted short term trend from the volume-weighted longer term trend.
The signal line is left as an because VW-MACD line is already weighted.
Developer: Buff Dormeier @BuffDormeierWFA on twitter
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.