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Volume Weighted Average Price (VWAP)

What is VWAP?​

The Volume Weighted Average Price (VWAP) is a trading benchmark that gives the average price a security has traded at throughout the day, based on both volume and price.
It is especially useful for institutional traders to assess whether they bought or sold at a good price.

VWAP resets each day and is typically used for intraday strategies.

How to Add a VWAP Indicator?​

  1. Click on the "+" button in the Indicators section.
  2. Select Volume Weighted Average Price (VWAP).
  3. Choose the data point and time frame.
  4. Click "Add" to save the indicator.

Configurable Parameters in VWAP​

1. On Data (Source Selection)​

  • Choose the input dataset (e.g., candlestick data or custom stream).
  • VWAP will be computed using the volume and price from this data.

2. Time Frame​

  • Sets the candle granularity.
  • For example, a value of 5 means VWAP will use 5-minute candles.

Element Name​

  • Default element name is _vwap.
  • You can rename this field to customize or differentiate between multiple VWAP instances.
tip

Renaming helps when combining VWAP with other indicators like RSI, MACD, or Bollinger Bands.

Use Cases for VWAP​

  • Institutional Benchmarking
    → Compare execution price with VWAP to evaluate trade performance.
  • Support and Resistance
    → VWAP often acts as a dynamic support/resistance level.
  • Trend Confirmation
    → Price above VWAP = Bullish, Price below VWAP = Bearish.
warning

VWAP is most effective in intraday trading. Avoid using it for longer timeframes or for assets with low volume.

Next Steps​

✅ Add VWAP to your strategy
✅ Use it for intraday mean reversion or breakout setups
✅ Combine with momentum indicators for more precision