The trading day starts with the usual VWAP dynamics due to the initial short amount of periods. The same is in force for a bearish breakout, but in the opposite direction.Р”Р„t the same time, if at the end of the trading day the VWAP is smooth, but visibly inclined, this speaks of a strong trend.

It is so strong that the price has managed to break its average value on the chart.

When the price goes above the VWAP indicator this means that the strength of the bullish move is strong. The reason for this is that the same signal from the indicator could be interpreted in two different ways. The signals from the VWAP could be confusing at some point. The later in the day we are, the more periods the indicator has averaged and the bigger pressure it would need in order to do a move. The reason for this is that it gives the average price value during the trading day. See that the further the indicator goes, the smoother it is and it reacts less to price moves. However, you have probably noticed something. Therefore people often confuse it with a Moving Average. Yes, it is a single curved line on the chart. The image below will show you how the VWAPР’В looks on a chart. In this manner, the Volume Weighted Average Price is a lagging indicator, because it is based on previous data. At the same time, it puts emphasize on the periods with higher volume. The VWAP is a trading indicator, which averages the closing prices during the given time period. Behold the mighty Volume Weighted Average Price (VWAP) indicator! What is the Volume Weighted Average Price? Today we are going to introduce you an indicator which takes into consideration price and volume. If you are a fan of trading indicators, then the following material will suit you.

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