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Anchored VWAP

A VWAP calculated from a chosen starting point such as an earnings gap or a swing low, rather than from the session open.

Intraday price swinging around VWAPA price line for one trading day weaving above and below a smoother VWAP line, with a band drawn one standard deviation either side of it.INTRADAY PRICE AND VWAPprice9:3012:4516:00+1 SD bandVWAP−1 SD bandIllustrative session. VWAP starts fresh at the open and firms up as the day fills in.
VWAP and its standard-deviation bands. VWAP is the day's average price weighted by how much volume traded at each price, so it shows where the bulk of the day's business was done. The bands sit one standard deviation either side, and price here swings between them all session.

Anchored VWAP applies the vwap formula from any bar you pick. Anchoring to a major event shows the average price paid by everyone who has traded since that event, which is often where dip buyers or trapped holders react.

Common anchors are an earnings-report gap, a major swing high or low, or the start of a year.

Example: a stock gaps up on earnings at $120 and rallies to $140. The VWAP anchored to the gap day sits at $131. A pullback to $131 is watched as a place where the post-earnings buyers are, on average, at breakeven.

Related: vwap, volume-profile, pullback, gap

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