Mastering VWAP (Volume Weighted Average Price)

Introduction

• VWAP: Volume Weighted Average Price
  • Different from traditional moving average because it incorporates volume.

Basics of VWAP

• To access anchored VWAP:
  1. Under Projection, click Anchored VWAP.
  2. Click on the chart where you want VWAP applied from; it will overlay on the chart.
• VWAP Line: The middle line
  • Above VWAP Line: Signals a bull market, acts as support, presents long trade opportunities.
  • Below VWAP Line: Signals a bear market, acts as resistance.
  • Break through VWAP: Possible trend change.

Examples of VWAP Application

• Bull Market Example:

  • Multiple entries at VWAP line: very long Wick candles, candle color change, inverted long Wick candles.
  • Clean break through VWAP and lower low indicates possible trend change downwards.
  • Falling wedge pattern followed by break above signals bullish trend; use VWAP Anchor Point here.
  • Falling wedge continuation pattern followed by bounce off VWAP line suggests continuation long entry.

• Bear Market Example:

  • VWAP line acts as resistance; clean break signals larger trend change.

Strategy Section

Strategy 1: VWAP Combined with Key Levels

• Usage: Pair VWAP with price action methods.

• Uptrend Example:

  • Reversal points create a key zone for long trade opportunities.
  • Trend line connects highs; break above trend line signals pullback is over.
  • Look for lower intraday timeframe entries.
  • Three bounces off the zone indicate strong level support, confirming bullish bias.
  • Starting moving uptrend sets VWAP Anchor Point.
  • Multiple long Wick candles at key zone and VWAP line offer long trade opportunities.

• Downtrend Example:

  • Moving downtrend sets VWAP Anchor Point.
  • Reversal point creates key resistance zone for short trade opportunities.
  • Look for intraday trend change confirmation for short entry.

Multi-Time Frame Usage

• Finding Intraday Trend Change Confirmation:
  • Use multiple time frames to gain earlier entries.
  • Example: Lower intraday timeframe shows swings in price, allowing trend line placement and earlier confirmations.

Strategy 2: Imperfect VWAP and Treat VWAP as a General Area

• Uptrend Example:
  • Set VWAP Anchor Point at the start of the move.
  • Reversal point creates key support zone.
  • Double bottom and multiple long Wick candles near VWAP line, even if not perfectly bouncing off it, still valid.
  • Break above trend line and higher high signal upfront continuation; look at lower intraday time frames for entries.

Conclusion

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