Previous Page

Volume Weighted Average Price (VWAP)

AnalyticsTrade Team
AnalyticsTrade Team Last updated on 27 Apr 2023

Table of Contents

What is Volume Weighted Average Price (VWAP)?

Volume Weighted Average Price (VWAP) is a trading benchmark used by traders that gives the average price of a security over a specific period of time. It is calculated by adding up the dollars traded for every transaction (price multiplied by number of shares traded) and then dividing by the total shares traded for the day. VWAP is a measure of the average price at which a stock is traded over a given period of time, usually one day.

History of VWAP

VWAP was first introduced in the early 1990s as a way to measure the performance of a stock over a certain period of time. It was initially used by institutional investors to measure the performance of their portfolios. Over time, it has become a popular tool for traders to measure the performance of a stock over a certain period of time. VWAP is also used by traders to identify potential entry and exit points in the market.

Comparison of VWAP to Other Trading Benchmarks

Benchmark Description
VWAP Average price of a security over a specific period of time
Simple Moving Average (SMA) Average price of a security over a specific period of time
Exponential Moving Average (EMA) Average price of a security over a specific period of time, with more weight given to recent prices
Relative Strength Index (RSI) A momentum indicator used to measure the speed and change of price movements

Summary

Volume Weighted Average Price (VWAP) is a trading benchmark used by traders to measure the performance of a stock over a certain period of time. It is calculated by adding up the dollars traded for every transaction (price multiplied by number of shares traded) and then dividing by the total shares traded for the day. VWAP is a useful tool for traders to identify potential entry and exit points in the market. For more information about VWAP, traders can visit websites such as Investopedia, Yahoo Finance, and Bloomberg.

See Also

  • Simple Moving Average (SMA)
  • Exponential Moving Average (EMA)
  • Relative Strength Index (RSI)
  • Bollinger Bands
  • Moving Average Convergence Divergence (MACD)
  • On Balance Volume (OBV)
  • Average Directional Index (ADX)
  • Stochastic Oscillator
  • Price Volume Trend (PVT)
  • Accumulation/Distribution Line (ADL)

Do you like the post? Share it now:

AnalyticsTrade Team

AnalyticsTrade Team

🎉 Introducing AnalyticsTrade's exceptional team of expert analysts! 🌟 These seasoned pros have been dominating the capital market, trading a diverse range of assets for more than 15 years! 📈💹 Get ready to level up your game with our top-notch, captivating resources in the capital market! 🚀📚

Was this article helpful?

X

Thank You for Contacting Us!

Your email has been successfully submitted and we will get in touch with you shortly