VWAP Indicator

Investors can utilise VWAP, an intraday price metric, to determine whether to take an active or passive approach to position entries.

A stock may be bullish if it is trading above the intraday VWAP, while a stock may be bearish.

VWAP is calculated by multiplying the typical price by volume and dividing by total volume.

Traders use VWAP to assess if a security is trading above or below its average price for the day and to gauge market momentum.

MVWAP, or Modified VWAP, is a moving average of VWAP over a specified time period, often used for intraday analysis.

While commonly used for stocks, VWAP can also be applied to other securities like futures and options.

Factors such as market volatility, order size, and timing can affect VWAP’s accuracy as a trading benchmark.