An average-price line that gives more weight to prices from high-volume candles, showing roughly what people paid on average recently.
- Weapon tier
- Standard
- Slots used
- On chart 1/6
Concept
VWAP is the average price of the last 20 candles, using each candle’s volume as its weight. Prices from heavily traded candles move the average more. So it is close to “the average price at which shares changed hands during that period”.
It is drawn as a single line on the price chart. A close above the line is read as a spot where recent buyers are mostly in profit, and below it as a spot where they are mostly at a loss.
- VWAP
Charts by TradingView Lightweight Charts™
80 candles with the VWAP line and volume. While the price falls, the closes stay below the line; at candle 60 (arrow) the close rises above it. The price then climbs slowly above the line. Keyboard: ←/→ to move, +/− to zoom, 0 to see the whole chart.
After the arrow candle the closes stayed above the line. This chart was chosen as a scene where the price rose after crossing; crossing above and then falling back below is common too. Drag the chart sideways with a finger or the mouse to move it, and pinch with two fingers to zoom in. With a keyboard, click the chart, then use ←/→ to move and +/− to zoom.
How it is calculated
For each candle, take the typical price = (high + low + close) ÷ 3.
Add up typical price × volume over the last 20 candles and divide by the total volume of the same candles. The heavier the volume of a candle, the more it counts in the average.
The VWAP in this game is not the intraday VWAP that restarts every day; it is a line that moves along 20 daily candles.
Parameters
| What it sets | Name in the game | Default | Range |
|---|---|---|---|
| Candles to average | period | 20 | 2 – 200 |
Trading ideas
Crossing above the line: when the close has been below the line for a while and then rises above it, it is commonly read as the price passing the average cost of recent buyers, meaning buyers have taken the upper hand. The chart on this page shows that scene.
Support and resistance: in an uptrend, a dip toward the line followed by a rise is read as the line holding the price up; in a downtrend, a rally to the line followed by a drop is read as the line pushing it down.
Common traps
- When volume spikes on one day, that candle’s price pulls the average for a long time. A sudden bend in the line may come from that single day.
- In sideways moves the price crosses the line often, so the signals wobble.
- The chart on this page was chosen as a scene where the price rose after the signal. Read it together with the trend (lesson 2) and volume (lesson 4).
In the game
- “VWAP” is a “Standard” weapon and uses 1 “On chart” line (limit 6).
- Together with the two Simple Moving Average lines in the starting setup (2 lines), it uses 3 lines, leaving 3 free.
Related indicators and lessons
- Volume Profile — An indicator that shows with horizontal bars which price levels saw the most trading, to find “the prices where many people bought and sold”.
- OBV — An indicator that keeps a running total, adding the volume of up days and subtracting the volume of down days, to show whether trading leaned toward buyers or sellers.
- MFI — An indicator that multiplies price moves by volume to show, from 0 to 100, whether more money has recently flowed in on the buying side or the selling side.
- Volume Oscillator — An indicator that shows how many % the short-term average volume is above (or below) the long-term average, telling you whether trading is heating up or cooling down.
- Volume Ratio — An indicator that shows the volume of recent up days as a % of the volume of down days, telling you whether trading leaned toward buyers or sellers.
- AD Line — An indicator that keeps a running total of each candle’s volume, weighted by where the close ended between the day’s high and low, to show buying pressure (accumulation) and selling pressure (distribution).
- EOM — An indicator of “how easily the price moves”, showing whether the price rises (or falls) easily even on light volume.
- PVT — An indicator that keeps a running total of “% move × volume” for each candle, showing whether volume pushed more on the rising side or the falling side.
- CMF — An indicator that weighs, by volume, whether closes over the last 20 candles mostly ended near the top or the bottom of each day, shown between −1 and +1.
- Force Index — An indicator that multiplies how far the price moved by volume, showing whether the “force” was behind the rising side or the falling side.
- 4. Volume and volume MA
- 3. Moving averages