PriceBeginner
VWAP
Volume Weighted Average Price
VWAP is the average price of a stock weighted by its trading volume. It is used by institutional traders as a benchmark for fair value and execution quality.
How It Works
VWAP is calculated by dividing the cumulative sum of (price × volume) by cumulative volume throughout the trading session. It resets each trading day.
Formula
VWAP = Σ(Typical Price × Volume) / Σ(Volume) where Typical Price = (High + Low + Close) / 3
Signal Interpretation
Price above VWAP
Buyers are in control intraday — bullish sentiment.
Price below VWAP
Sellers are in control intraday — bearish sentiment.
VWAP Retest
Price pulling back to VWAP and bouncing is a common intraday trade setup.
Use Cases
- ▸Intraday trading reference level
- ▸Institutional execution benchmark
- ▸Identifying mean reversion opportunities intraday
Limitations
- ⚠Resets daily — not useful for multi-day analysis
- ⚠Works best for liquid, high-volume stocks
- ⚠Less meaningful in low-volume periods
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BazaarPulse Tip
In BazaarPulse, VWAP is calculated from historical data across the period, which serves as a medium-term volume-weighted average rather than intraday VWAP.