Definition. The volume-weighted average trade price since the start of a chosen period, e.g. the session.
How it works
VWAP shows what price the average market participant paid in a given period. Large participants often judge execution quality against it. Standard deviation bands are drawn around VWAP.
Example
Price stays above VWAP for most of the session. Buyers control the day, and the average buyer in the session is “in profit”.
What to watch out for
VWAP isn't support or resistance by definition. It's a reference point to be read in context.
This is the session volume profile with VWAP in the Hetman Terminal (Battle Map of the Day). Screenshot from the Hetman Index (IHA) – a training instrument, simulated data. See all the Hetman Terminal tools →
♛ The Hetman Terminal is part of Club: live for Dow Jones from the Bishop plan, 6 markets (Dow Jones, S&P 500, Nasdaq, gold, crude oil, Bitcoin) and automatic detection of order flow events from the Rook plan. A session on the ♛ Hetman Index (training, simulated data) in the full panel comes with the Knight plan and above. Compare the plans →
You'll find the full explanation with graphics, examples and exercises in the 📖 Order flow encyclopedia space, and its use in the live market in the 🔴 Live Room. Both are available to Club members (in Polish).
