VWAP (Volume Weighted Average Price)
VWAP is the average price weighted by volume for the trading day. It shows the average price institutional investors paid. Resets daily.
Understanding the Concept
VWAP is the institutional trader's best friend. Big players need to execute large orders without moving the market, so they aim to buy below VWAP and sell above it. If price is above VWAP, buyers are winning. Below VWAP, sellers are in control. Day traders use VWAP as dynamic support/resistance—it's remarkably accurate. The indicator works best for intraday trading. Because it resets daily, it's useless on higher timeframes. Many algo trading strategies use VWAP to execute orders, making it a self-fulfilling indicator.
Real-World Example
Tesla opens at $200 and VWAP builds throughout the morning at $198. Price dips to $197 and bounces off VWAP—institutional buyers were waiting there. You go long with a stop below VWAP.
How Strykr Helps
Strykr's AI monitors VWAP signals across 5,000+ assets in real-time. Get instant alerts when significant patterns emerge, with context about market conditions and confluence factors.
Try Strykr Free