VWAP

intermediate

7 min read

Updated 2026-07-13

Reviewed by SST Editorial

Volume Weighted Average Price (VWAP) is an intraday technical indicator calculated by dividing the total dollar value traded (price multiplied by volume) by the total volume traded during that trading session. Unlike moving averages, VWAP gives more weight to price points with higher trading volume, making it a highly accurate measure of value and a major benchmark for institutional execution.

Key Takeaways

01.Calculated intraday, resetting at the market open.
02.Calculates cumulative dollar volume divided by cumulative volume.
03.Acts as a dynamic support or resistance line for intraday traders.
04.Used by institutional algorithms to execute large orders without causing market impact.

Why it matters

VWAP is the institutional gold standard for trade execution. Buying below VWAP is considered a good fill (below average market cost), while buying above is considered a premium fill.

Common Mistakes

Using VWAP on multi-day charts

Standard VWAP resets daily and is strictly an intraday indicator. Using it on weekly or monthly charts is a formula error unless specifically using Anchored VWAP.

Command Palette

Key Takeaways

Why it matters

Common Mistakes

Using VWAP on multi-day charts

Further Reading