Indicators
VWAP (volume-weighted average price)
The average price of the day weighted by volume, reset every session. Institutions use it as a benchmark for fair price.
Why it works
Price above VWAP means buyers are in control for the day; below, sellers. Large orders are often executed around it.
How to use it
In an intraday uptrend, look for buys when price pulls back to VWAP and holds. A clean break below can flip the day’s bias.
The typical mistake
Using yesterday’s VWAP for today: it resets every session.
FAQ
What is VWAP in trading?
The average price of the day weighted by volume, reset every session. Institutions use it as a benchmark for fair price.
How do you trade VWAP?
In an intraday uptrend, look for buys when price pulls back to VWAP and holds. A clean break below can flip the day’s bias.