VWAP (Volume-Weighted Average Price)
VWAP is the average price weighted by volume, used as an intraday fair-value anchor and institutional benchmark.
VWAP is the session's volume-weighted average price, the average paid by everyone trading today. Price above it signals buyer control, below it seller control, and it resets each session.
The Volume-Weighted Average Price (VWAP) is the average price of an instrument weighted by traded volume, usually calculated from the session open. It represents the average price every participant paid today, which is why institutions use it as a benchmark and traders use it as an intraday fair-value line. Price above VWAP suggests buyers are in control; below suggests sellers. VWAP resets each session, making it an intraday tool rather than a swing tool.
How It Works
- Sum of (price x volume) divided by total volume, from session open
- Institutional benchmark for execution quality
- Common intraday anchor in indices, futures and crypto
Trading Tips
Rejections at VWAP in a trending session are tradeable levels
VWAP works best in intraday timeframes and range sessions
Combine with volume: VWAP holding on heavy volume is a stronger signal
Related Terms
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