OPEN-SOURCE SCRIPT
Flat VWMA Highs 3
The Flat VWMA High3 is a short-term resistance detection indicator based on the Volume-Weighted Moving Average (VWMA) applied to the high prices of candles. By default, it uses a length of 3, averaging the last three highs while weighting them according to traded volume.
Because higher-volume candles have a greater influence on the calculation, the indicator is designed to highlight areas where significant selling pressure or price rejection may be occurring. When the VWMA of highs becomes nearly horizontal, the script projects a short blue resistance segment into future bars, helping traders identify potential overhead supply zones.
Usage
The indicator is intended to be used similarly to traditional support and resistance analysis:
The indicator works particularly well for:
Identifying repeated upper wick rejection areas
Optional Features
Because higher-volume candles have a greater influence on the calculation, the indicator is designed to highlight areas where significant selling pressure or price rejection may be occurring. When the VWMA of highs becomes nearly horizontal, the script projects a short blue resistance segment into future bars, helping traders identify potential overhead supply zones.
Usage
The indicator is intended to be used similarly to traditional support and resistance analysis:
- Bullish Signal: Price breaks and closes above a resistance segment, suggesting supply may have been absorbed.
- Bearish / Resistance Holding: Price rejects from the segment, indicating sellers may still be defending that area.
The indicator works particularly well for:
Identifying repeated upper wick rejection areas
- Detecting short-term supply zones
- Visualizing potential institutional resistance levels
- Combining with gap analysis, moving averages, or volume studies
Optional Features
- VWMA Length
Default: 3 - Increase the length to identify broader or smoother resistance areas.
- Flatness Threshold (%)
Default: 0.15% - Controls how “flat” the VWMA must be before a resistance segment is drawn. Higher-volatility stocks may require a larger threshold.
- Extend Segment Right Bars
Default: 5 - Controls how far the resistance segment projects into future bars.
- Show VWMA High
- Displays the underlying VWMA(high) line directly on the chart for additional visualization.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.