VWAP
Volume-weighted average price used as an intraday fair value benchmark.
VWAP (Volume Weighted Average Price) calculates the average price weighted by volume throughout a trading session. It represents the 'true average price' that accounts for where most trading activity occurred — not just price levels.
Why It Matters
VWAP is widely used by institutional traders as a benchmark. Price above VWAP suggests buyers are in control. Price below suggests sellers dominate. It acts as a dynamic support/resistance level that resets each session, making it particularly valuable for intraday strategies.
Settings Explained
Direction — Bullish, bearish, or both.
Price Source — Which price to use in the calculation. 'Typical Price (HLC/3)' uses the average of High, Low, and Close — the most common setting. 'Close' uses only the closing price.
Session Reset — Whether VWAP resets at the start of each trading session. This is the standard behavior. When enabled, VWAP starts fresh each session, giving you a clean intraday benchmark.
Full Body Candle — Whether to require the full candle body (not just a wick) to be above or below VWAP for signal validation. This produces more reliable signals by filtering out wick-only crosses.
Look Back Mode — How far back to calculate.
Example Use Case
You build an intraday strategy that only buys when price is above VWAP and sells when price is below. Combined with a momentum indicator like RSI, this creates a 'buy strong above VWAP, sell weak below VWAP' system.
The first time price pulls back to VWAP after moving away from it is often the highest-probability touch. Subsequent touches tend to have weaker reactions.