{"id":38966,"date":"2014-10-03T14:03:12","date_gmt":"2014-10-03T18:03:12","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=38966"},"modified":"2014-10-03T14:03:12","modified_gmt":"2014-10-03T18:03:12","slug":"why-you-need-vwap-for-your-intraday-trading","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/why-you-need-vwap-for-your-intraday-trading","title":{"rendered":"Why You NEED VWAP For Your Intraday Trading"},"content":{"rendered":"<p><em>*****This is a guest blog submission from Jordan Caroleo &#8211;\u00a0<a href=\"https:\/\/twitter.com\/Jordar411\" target=\"_blank\">@Jordar411<\/a>***** \u2014 Editor\u2019s Note<\/em><\/p>\n<p>One of the best studies I use during the course of my trading is the VWAP. VWAP = Volume Weighted Average Price. What is this? Basically, the measure of average price throughout the day that is specific to volume. This is crucial for intra-day traders (and longer time-frames alike) because of the number of ways you can use it for confirmation.<\/p>\n<p>1.) Relative strength in regards to VWAP.<\/p>\n<p>Traders can identify the relative strength (RS) in a stock in regards to the VWAP. Is your stock actively testing it&#8217;s VWAP trend-line but cannot cross above\/below? Is it testing over\/below and failing\/holding? These are things to consider when using VWAP in regards to RS.<\/p>\n<p>2.) Confirmation for intra-day changes in trend.<\/p>\n<p>VWAP can help you confirm new sellers and new buyers. For example, if your stock has been trending lower (would be below VWAP) in the morning but catches a bid\u00a0 and trends higher (potentially crossing over VWAP) you can guess that new buyers have come into the name to support. Likewise for the opposite. I personally look for plays that have multiple tests against the VWAP. Once I get the confirmation of the crossover and holding, that is an area of interest.<\/p>\n<p>3.) Using VWAP to identify &#8220;bagholders.&#8221;<\/p>\n<p>For many, (especially funds &amp; larger players) VWAP is the volume based break-even point for the bagholders. As stock moves lower below VWAP to new lows (this example is a long situation). Similar to a squeeze, these longs start toliquidate, creating a steeper VWAP. A\u00a0 lot of traders use the VWAP as a stop, which is also acceptable.<\/p>\n<div id=\"attachment_38967\" style=\"width: 610px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-38967\" class=\"wp-image-38967 size-full\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2014\/10\/IMG_3474-e1412357989508.jpg\" alt=\"IMG_3474\" width=\"600\" height=\"338\" \/><p id=\"caption-attachment-38967\" class=\"wp-caption-text\">$CLF drives lower after testing its VWAP. This is a play on relative weakness. Using this along with other key factors (catalyst, sector\/market correlation, etc) you can build confirmation entering and exiting your trades.<\/p><\/div>\n<div id=\"attachment_38968\" style=\"width: 610px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-38968\" class=\"wp-image-38968 size-full\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2014\/10\/IMG_3475-e1412358095861.jpg\" alt=\"IMG_3475\" width=\"600\" height=\"338\" \/><p id=\"caption-attachment-38968\" class=\"wp-caption-text\">$GILD drives higher with support at the VWAP. What I like about this example is the multiple tests against it as well.<\/p><\/div>\n<p>These are just a few points on why VWAP is crucial to intra-day trading and analysis. You cannot trade SOLELY on VWAP, but it is very helpful for confirmation and thesis-building.<\/p>\n<p>no relavant positions<\/p>\n","protected":false},"excerpt":{"rendered":"<p>*****This is a guest blog submission from Jordan Caroleo &#8211;\u00a0@Jordar411***** \u2014 Editor\u2019s Note One of the best studies I use during the course of my trading is the VWAP. VWAP = Volume Weighted Average Price. What is this? Basically, the measure of average price throughout the day that is specific to volume. This is crucial for intra-day traders (and longer &#8230; <a href=\"https:\/\/www.smbtraining.com\/blog\/why-you-need-vwap-for-your-intraday-trading\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":290,"featured_media":38968,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[456,1373,15],"tags":[1284,4016,151,190],"class_list":["post-38966","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-trader_development","category-trading-lesson","category-trading_theory","tag-care","tag-gpro","tag-market","tag-short"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Why You NEED VWAP For Your Intraday Trading | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/why-you-need-vwap-for-your-intraday-trading\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why You NEED VWAP For Your Intraday Trading | SMB Training\" \/>\n<meta property=\"og:description\" content=\"*****This is a guest blog submission from Jordan Caroleo &#8211;\u00a0@Jordar411***** \u2014 Editor\u2019s Note One of the best studies I use during the course of my trading is the VWAP. 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