65-Day Academy · Day 10 · Reading Charts
VWAP — the Institutional Line in the Sand
What it is
Volume-Weighted Average Price: the average price weighted by volume, reset each session. It is the benchmark institutions are measured against — a fund that bought below VWAP "beat the market's average fill." Huge algorithmic order flow is programmed around it.
How traders use it
Price above VWAP = intraday buyers in control (bullish bias); below = sellers (bearish). Repeated VWAP rejections define intraday S/R. Mean-reversion traders fade extensions from it; momentum traders use "pullback to VWAP that holds" as an entry. On daily charts, the anchored variant (from earnings day, from a swing low) marks the average cost of everyone who bought since that event — defenders of that level are underwater or in profit, which shapes their behavior.
What you'll practise
True or false: VWAP resets every trading day, so yesterday's VWAP has no direct meaning today.
10 XP in the app · introductory
Sources
- Volume-Weighted Average Price (VWAP)Investopedia
Take this lesson graded in the app →
All lessons are for educational purposes only and are not individualized financial advice, a recommendation, or a solicitation to buy or sell any security. Options involve substantial risk and are not suitable for every investor.