VWAP Indicator - Share India (2024)

FAQs

What is the VWAP indicator in India? ›

The VWAP tells us about the real average price of the stock. This indicator is like the moving average, which works on historical data and makes the decision process easier in intraday trading. A VWAP is a popular tool among investors.

Relative Strength Index (RSI): RSI can be used in conjunction with VWAP to identify overbought or oversold conditions, providing additional confirmation for potential trade setups.

Since it uses historical data, it is a lagging indicator. Although some traders still consider the VWAP to be fairly accurate, it may be prudent to use it with other technical tools to ensure that your trading strategy is on the level.

Note, VWAP can be applied only on an intraday time frame and cannot be applied on EOD data. Once you select the time frame (1 min, 5 mins, 10 mins etc.), the engine calculates the VWAP and plots it on the chart as an overlay. You can now visualize the VWAP and the current market price and plan your trades accordingly.

How is VWAP calculated for Nifty? The VWAP calculation for Nifty is the same as for individual stocks. It is the ratio of the value traded to total volume traded for the 50 stocks comprising the Nifty index over a specified time period intraday.

Typical Timeframes

A 5-minute or 15-minute VWAP is typical when trading intraday to illustrate the trend.

Win Rate: 79.57%

VWAP is the average price of a stock weighted by volume. By monitoring VWAP, a trader might get an idea of a stock's liquidity and the price buyers and sellers agree is fair at a specific time. The VWAP indicator can be used by day traders to monitor intraday price movement.

Importance of Volume Weighted Average Price

The market is bearish when the price is below the VWAP and bullish if the price is above the VWAP. During a bullish market, there will be an increase in the buying price, and the trend line on the chart will move upward.

What are the disadvantages of VWAP? ›

What is a major disadvantage of the VWAP? The VWAP, similar to a moving average indicator, is a lagging indicator, so by the time the price cuts above the VWAP line, the price is already in the midst of an uptrend. Likewise, when the price cuts under the VWAP line, the price is already in the midst of a downtrend.

VWAP is calculated by multiplying the typical price by volume and then dividing by total volume.

Superior to VWAP is implementation shortfall, a more comprehensive measure of trade execution performance. VWAP stands as a prominent technical indicator in the trading realm, yet traders may discover alternative indicators that align more closely with their specific requirements.

वॉल्यूम भारित औसत मूल्य के लिए एक ट्यूटोरियल (VWAP)

वॉल्यूम भारित औसत मूल्य एक बहुमुखी उपकरण माना जाता है तकनीकी व्यापारियों द्वारा इसका उपयोग व्यापक रूप से निवेश के लिए अच्छी इक्विटी खोजने में किया जाता है।

The longer-term retail traders anchor VWAP to a key level of support on longer time frame charts (like hourly or daily) and use this level as a key support for swing trading.

Anchored VWAP is a technical indicator that can be used to identify entry and exit points for a trade based on the weighted rupee cost average of a financial security. The AVWAP computes the average price of a security relative to its volume over a period of time. Great! But VWAP also helps you do the same thing.

The "VWAP CURRENT YESTERDAY" is a Pine Script designed for TradingView that automatically calculates and plots the Volume Weighted Average Price (VWAP) for the current day, the previous day. Dynamic VWAP Calculation: Automatically generates VWAPs for 1 day and 2 day.

Volume Weighted Average Price. Volume Weighted Average Price is equal to the sum of the volume of every transaction multiplied by the price of every transaction divided by the total volume for the trading day. A trading benchmark particularly used in pension plans.