How effective is the VWAP?
- Thread starter cashclay
- Start date
A 200 period moving average on a daily chart represents the average price for the last year running. Quite a lot of market participants are looking at it and thus it is good to be aware of it
A 200 period moving average on a 1, 5, 30, 60 minute chart will all have different values and unless it is your personal line in the sand that you have found to have a statistical edge for trading with a specific risk:reward - stop: profit ratio it is just an arbitrary data point.
VWAP on any period intraday chart will give you basically the same constant value. Most hedge funds and pension plan trades are incorporating it in their stock purchase program decision making. For a day trader it is good to be aware of it. Follow the money.
A 200 period moving average on a 1, 5, 30, 60 minute chart will all have different values and unless it is your personal line in the sand that you have found to have a statistical edge for trading with a specific risk:reward - stop: profit ratio it is just an arbitrary data point.
VWAP on any period intraday chart will give you basically the same constant value. Most hedge funds and pension plan trades are incorporating it in their stock purchase program decision making. For a day trader it is good to be aware of it. Follow the money.
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Good points; a huge number of mutual funds use it+ they get paid on gross assets.And on some charts, a 100 day moving average, 100 week moving average chart is the same number, on purpose.[ Edit;in other words,100dma is same number on daily charts+ 100 day moving average number is same number on weekly charts, on purpose]
NOT real time, but last day of DEC,2018, prelunch ,VWAP on SPY=Hi,$250.04; low =247.59. In other words,price is below 100 day moving average. NOT a prediction. Volume weighted moving average, is faster than some, so i seldom use[or overweight] that one LOL
