Definition. Lines drawn around VWAP at multiples of the volume-weighted standard deviation of price.
How it works
The bands show how far price has moved from the average trade price in terms of the period's volatility. The further from VWAP, the more “stretched” the move is relative to the trading so far.
Example
On a balanced day, price moves mainly between VWAP and the inner bands. On a trend day it can ride the outer band for a long time.
What to watch out for
The bands are volatility context, not reversal levels. Their significance depends on the day type.
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).
