If you’re a trader or chartist, you’ve probably heard about VWAP. Volume weight average price (VWAP) is a moving average indicator that is explained here.
VWAP ( volume weighted average price) is very popular indicator among expert traders.VWAP is average price of stock weighted by volume. With the help of VWAP indicator a trader can easily predict price movements.Big players in the market use VWAP to beat retail traders.
What is VWAP indicator?
VWAP stands for Volume Weighted Average Price of rather than just being a simple average where you take all the numbers, add them together, and then divide them by the number of items in the list. It is weighted with volume. So,the volume weighted average price may be used as a benchmark to identify potential market entries and exits Institutional traders, market makers, and retail traders all use this helpful signal indicator. VWAP is Typically seen on an intraday chart. VWAP is very hit indicator of Tradingview.
How accurate is VWAP indicator?
VWAP indicator is lagging indicator. If you use only VWAP it does not give you right signals but if you use this VWAP indicator with other best indicator combinations it may give you accurate signals of buy/ sell trade.
What is success rate Of VWAP indicator?
We have talked to many traders which are making good profits. Success rate of VWAP indicator is 70% when it is used with moving averages. And if used solely then success rate Of VWAP is 50% only.
List of best indicators combination with VWAP
1. Moving Averages
Moving averages indicators can be used with VWAP. This combination is ultimate hit combination because everytime when MOVING AVERAGES and VWAP gives a signal then traders make huge profits in day trading mainly.
This both indicators together does not work for scalping. It work only for 5-15 minutes time frame
2.RSI ( relative strength indicator)
Nowadays RSI is becoming popular among new age traders. RSI is easy to use and easy to understand and give more accurate signals to get great results
How to use VWAP in tradingview?
Go to Tradingview.com
1.First of all open the stock you wants to trade.
2.Click on Add indicators button
3. search VWAP in search bar
4. select the VWAP INDICATOR.
Now you will see 3 lines which are called V1, V2, ,V3 or upper band, middle band, lower band
Best settings for VWAP for intraday trading ?
- First of all go to settings of VWAP
- Go to input then look for source button
- Change hlc3 to ohlc4
- Save the changes
- Now use another indicator RSI
- Change some settings of RSI
- Go to style
- Change RSI upper band to 60 and lower band to 40 and close the middle band
- When RSI touch 60 that time you have to make sell position and make sure upper band line of VWAP is high then candles and candle is bearish.
- And when RSI touches the lower point 40 you should make buy position while making sure lower band line has a bullish candle and line is lower
- Create a strategy and backtest this strategy for good profits.
Best VWAP settings for scalping?
Timeframe use only 1 minutes time frame in scalping to use VWAP indicator for better results
first of all add indicator in stock you wants to analyse
- Open settings
- Go to inputs
- Click on source
- Now change the source to hlcc4
- Save changes
Now whenever there is bullish candle on lower line you can catch a big move of a candle.
At lower line when you see bullish candle enter the trade and exit right after candle closes.
When you see bearish candle on upper line make a sell trade and exit after candle close
Tip: increase your sense of support and resistance on each and every indicator. All indicators indicates only support and resistance. Find the best one for you
Conclusion
VWAP is very famous indicator among big players. Using VWAP with different beat combination of indicators will make your trade more accurate.
Is VWAP better then EMA
VWAP is always better for day traders then EMA. Because EMA works better for swing trading and to analyse chart on daily or weekly and monthly basis and on the other hand VWAP used for 5-15 minutes time frame.
How do you use VWAP effectively?
To use VWAP more accurately and efficiently. You need to use it with another indicator RSI or MOVING AVERAGES.
Is VWAP good for forex
not at all, VWAP is best for stock trading only . It doesn’t even work accurately in commodities.
How do i master VWAP ?
Practice more and more support and resistance in VWAP and backtest every strategy and spend some time analysing previous charts so you can get sense of making strategies.
Do traders use VWAP
Yes big institutional traders use VWAP to find out best entry and exit points