Discover Hidden Success Trading With VWAP

VWAP is short for volume weighted average price and it identifies the true average price of an asset by factoring the volume of transactions at a specific price point and not simply based on the closing price. Professionals rely on two important factors when making trading decisions—Price and Volume. These two elements tell you everything you need to know about price and where it may be headed.

VWAP trading strategies started to grow in popularity in the 1990s. The stock market was hot back then and hedge fund managers and major investors were looking for a new way to evaluate the markets.

Using the volume-weighted average price when trading in short-term time frames is highly effective and simple. One common strategy for a bullish trader is to wait for a clean VWAP cross above, then enter long. When there is a VWAP cross above, the security shows that buyers may be stepping in, signaling there may be upward momentum. When a stock's price breaks above the VWAP, the previous time frame's VWAP can be thought of as a support level.
 
Barry Norman
The Director of Investors Trading Academy as well as a published author and educator. Barry brings with him over 35 years of financial market knowledge and experience. He holds an MBA in Finance and Economics from UCLA and an undergraduate degree in Economics from the University of Maryland. Barry was award the title of “Best Education in Europe” by Global Banking & Finance. Barry is also a presenter for the MoneyShow and many well-known news sources.