What is VWAP? π
VWAP, or Volume Weighted Average Price, is a technical indicator that shows the average price at which an asset is traded over a given time period.
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VWAP, or Volume Weighted Average Price, is a technical indicator that shows the average price at which an asset is traded over a given time period.
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It's calculated by taking the sum of all traded prices for an asset during the period and dividing it by the total volume of units traded.
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VWAP is often used as a benchmark for evaluating the performance of investment managers and traders. It's also used by institutional investors as a reference point for executing large trades, as it can help them avoid affecting the market price of an asset.
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VWAP can be calculated for different time periods, such as daily, weekly, or monthly. It's important to note that VWAP is a cumulative indicator, meaning that it's constantly updated as new trades are made and volume changes.
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VWAP can be used in a number of ways, including as a reference point for setting stop-loss orders or for identifying potential support and resistance levels.
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I personally really enjoy using the daily & weekly VWAP when looking for low timeframe reversal areaβs as it tends to give a good initial reaction.
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VWAP can be a useful tool for traders and investors, but it's important to understand its limitations and to use it together with other analysis techniques and indicators.
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