Module 3 — Price behaviour
VWAP: volume-weighted average price
6 minute read
In plain English
VWAP is the average price of every share traded today, weighted by volume. It is the session's centre of gravity.
Why it matters
Many institutional participants measure their fills against VWAP, so price frequently reacts around it.
Example
A stock above VWAP all session means the average buyer today is in profit; below it, the average buyer is not.
Try this
Add VWAP to a chart and watch how price behaves the first time it returns to it.
Common mistake
Treating VWAP as a buy or sell line.
What this does not mean
Being above VWAP does not mean a stock will keep rising.
Educational content only. Not financial advice.