Learn how to effectively use the Anchored Volume Weighted Average Price (or Anchored VWAP) indicator during a stock market bounce

Key Takeaways:

  • Identifying a stock market bounce & using Anchored VWAP
  • Strategies for applying Anchored VWAP during a market recovery
  • Real-world examples using current trade setups

For those who don’t know what Anchored VWAP (Volume Weighted Average Price) is, it is is a technical analysis tool that calculates the average price of a security over a specified period, with the starting point “anchored” to a specific event or time. This event could be the start of a trading session, a news release, or a significant price movement.

Key points about Anchored VWAP:

  1. It helps traders identify the average price at which a security has traded since the chosen starting point.
  2. The anchor point is selected based on the trader’s preference and the specific event they want to analyze.
  3. It can be used to determine potential support and resistance levels, as prices tend to revert to the mean over time.
  4. Traders may use Anchored VWAP to make trading decisions, such as entering or exiting positions when the price crosses above or below the Anchored VWAP line.
  5. It can be particularly useful in assessing the impact of a specific event on the price action of a security over time.

In summary, Anchored VWAP is a customizable indicator that allows traders to analyze the average price of a security from a specific starting point, helping them make informed trading decisions based on the price action in relation to that event.

And if you enjoyed this post, you might also like the one I recently did on swing trading bull flag patterns.