VWAP Indicator
The Volume Weighted Average Price (VWAP) indicator is used by traders to identify the true average price of a security throughout the trading day, factoring in both price and volume. To trade using VWAP, you can look for entry points when the price crosses above or below the VWAP line: a bullish signal occurs when the price moves above VWAP, suggesting a potential uptrend, while a bearish signal happens when the price drops below VWAP, indicating a potential downtrend. Additionally, traders often use VWAP as a dynamic support or resistance level; buying near VWAP during an uptrend or selling short near VWAP during a downtrend may enhance trading decisions. It's also important to combine VWAP signals with other technical indicators to confirm trade setups.