VWAP indicator means Volume Weighted Average Price. It tells you the average price a stock has traded at during the day, based on both price and volume. It helps traders understand if the stock is trading at a fair value. VWAP is mostly used in intraday trading to find good buy or sell points based on market activity.

What Does the VWAP Indicator Show?

VWAP shows the average trading price of a stock for the day, weighted by volume. This means it gives more importance to prices with higher traded volume. It helps traders know if the current price is above or below the day’s average value. It acts like a support or resistance line during intraday trading.

Why Do Traders Use the VWAP Indicator?

Traders use VWAP to find good entry and exit points during the trading day. If the stock price is below VWAP, it means the stock is trading at a discount. If it is above VWAP, the stock is considered expensive. Many traders buy below VWAP and sell above it, following this logic for profits.

Is VWAP Better Than Moving Average?

VWAP includes both price and volume, while moving average only looks at price. This makes VWAP more accurate during the trading day. It reacts better to real-time market movements and gives clearer signals for intraday traders. Many prefer VWAP for same-day trades and use moving averages for longer-term trends.

When Should You Use VWAP?

VWAP is best used during intraday trading. It resets every day, so it’s not useful for long-term investing. Day traders use it from market opening till closing to guide their trades. If price is below VWAP and then crosses above it with volume, it is a buy signal. If price falls below VWAP, it is a sell signal.

How Do You Add VWAP to a Trading Chart?

To add VWAP, just open your charting platform like TradingView, Zerodha Kite, or Angel One. Select your stock and time frame (1-minute or 5-minute for intraday). Go to the indicator section, search for “VWAP,” and click to apply it. You will see a single line running through the chart—that is your VWAP line.

Can Beginners Use the VWAP Indicator?

Yes, VWAP is very beginner-friendly. It’s a single line that’s easy to understand. Just remember: below VWAP can be a good time to buy, above VWAP can be good to sell. Don’t rely only on VWAP. Always check volume and price action too. Practice in a demo account before real trading.