VWAP

What this unit covers

Learn what VWAP represents and how to read price against it, and where it is useful: mostly within a single day and for large orders, not for every trading style.

By the end you will be able to

• Explain what VWAP represents and why bigger trades count more toward it.
• Read price above or below VWAP as a same-day comparison, not a value judgment.
• Recognise why VWAP starts again each day and what that limits it to.

How it starts: The Same Price, Two Readings

1. A stock trades at 101 rupees at three in the afternoon.
2. One trader calls 101 rupees cheap, another calls it expensive.
3. Both are looking at the same average line, so who is right?

Words you will meet

Volume-Weighted Average Price (VWAP)

The average price of a stock for the day so far, weighted so bigger trades count more.

Volume

The number of shares traded in a given period.

In this module: Technical Indicators

1. Moving Averages & Bollinger Bands
2. RSI
3. MACD
4. VWAP (this unit)