What is vwap and why is it important?

I keep seeing VWAP mentioned in trading chats, but I’m not clear on what it really means.

Should I be considering this when I trade? I’ve been trading for a bit but haven’t explored technical indicators deeply.

It would help to know if it truly impacts trading.

VWAP shows where most of the trading volume happened. It’s like a fair value zone and is important because institutions look at it for their execution quality. When the price is above VWAP, buyers are in control; when it’s below, sellers are taking charge. Pay attention to how price reacts at VWAP. A strong rejection can indicate a trend continuation, while a clear break can signal a reversal. For binary options, stick to 15-minute charts and above. Keep it simple and use it to confirm your price action analysis.

VWAP calculates average price weighted by volume traded.

Key uses:

• Price above VWAP = bullish sentiment
• Price below VWAP = bearish sentiment
• Acts as dynamic support or resistance
• Institutional traders use it for execution

Most effective on liquid assets with high volume.

Volume Weighted Average Price destroyed my first few months of trading because I completely ignored it.

Big mistake. I’d enter trades thinking I was smart, only to get crushed when price hit VWAP and bounced hard the other way.

Now I watch it religiously. When price approaches VWAP, I either take profit or wait for a clear break before entering new positions.

Using VWAP helped me make $340 last week on EUR/USD trades.

VWAP is your reference for buying at the right price for the day. It helps gauge if you’re getting a fair deal compared to others.

Traders often see price moving back to VWAP. On mobile, find it under VWAP or Volume Weighted Average Price. It can help prevent entering trades at poor prices.