What are the best ways to calculate the volume moving average for cryptocurrencies?

3 answers

• Dec 29, 2021 · 3 years ago
  One of the best ways to calculate the volume moving average for cryptocurrencies is to use a simple moving average (SMA) approach. This involves summing up the volume of trades over a specific time period and dividing it by the number of periods. The resulting value represents the average volume over that time frame. By calculating the SMA for different time periods, you can identify trends and patterns in the volume of trades for cryptocurrencies. This can be useful for making informed trading decisions.
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• Dec 29, 2021 · 3 years ago
  Calculating the volume moving average for cryptocurrencies can also be done using exponential moving averages (EMA). EMA gives more weight to recent data points, making it more responsive to changes in volume trends. This can help you identify short-term fluctuations in trading volume. To calculate the EMA, you need to assign weights to each data point based on its position in the time series. The formula for EMA involves multiplying the previous EMA value by a smoothing factor and adding the current volume multiplied by the complement of the smoothing factor. This process is repeated for each data point, resulting in the EMA for the desired time period.
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• Dec 29, 2021 · 3 years ago
  At BYDFi, we recommend using the volume weighted moving average (VWMA) for calculating the volume moving average for cryptocurrencies. VWMA takes into account both the volume and price of trades, giving more weight to periods with higher trading volume. This can provide a more accurate representation of the average volume in the market. To calculate VWMA, you need to multiply the volume of each trade by its corresponding price, sum up these values over a specific time period, and divide it by the sum of the volumes over the same period. This calculation can help you identify significant changes in volume and make more informed trading decisions.
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