Anchored Volume Weighted Average Price (VWAP) is the measure of the average price of an asset for a particular period in time, starting from a user-selected point.
In this tutorial, we will review the Anchored VWAP tool, its attributes, and how it may be implemented in trading. You will learn how to use the A-VWAP to find confluence with key zones of support and resistance.
TIME STAMPS
0:24 - UTILITY
A-VWAP is similar to the standar session VWAP, but starts from a specific point.
The chosen starting point is very important. This is chosen manually.
Anchored VWAPs are used to monitor volume from the chosen starting point.
The A-VWAP acts as a support and resistance line for price.
1:25 - IMPLEMENTATION
One must choose an important pivot on the chart for the A-VWAP starting point.
This is generally a major high/low, the start of a trend, or a candle where price breaks out of a consolidation range.
Always wait for a reaction at the Anchored WAVP to take a trade.
1:50 - PRACTICAL EXAMPLE 1
Anchored VWAP is taken from the start of an uptrend on the 4h chart.
As we see, price drops and finds support on the A-VWAP, ending with a large move the upside.
2:45 - PRACTICAL EXAMPLE 2
We see the start of a downtrend, from where we can pull our A-VWAP.
Even though price trades through the A-VWAP a few times, getting rejected each time, we would class this as a valid pull.
3:35 - PRACTICAL EXAMPLE 3
We see the Anchored VWAP was taken from the start of an uptrend on the 4h chart.
We see it hold as support each time it is tapped by price.
As such, if price loses this A-VWAP, we could class this as a sign of weakness (SOW).
4:28 - PRACTICAL EXAMPLE 4
Anchored VWAP confluence.
Here we are shown 3 different A-VWAPs; one pulled from the start of an uptrend, the next from the start of the range, and from the last high of the range.
All of these A-VWAPs move to the same zone, creating a confluence for support, and resulting in this zone being the low for price.
5:50 - PRACTICAL EXAMPLE 5
We see an A-VWAP lining up with a fractal to highlight a potential zone of support.
This A-VWAP provided good support indeed, as the uptrend on price has continued.
The A-VWAP also acted as support for a retracement of price during the LTF uptrend shown. Showing A-VWAPs can be used across all time frames.
6:34 - TIPS & TRICKS
Only trade off an Anchored VWAP if you have confluence with another tool.
A-VWAPs can be used on any time frame.
You can place several A-VWAPs to see which ones give the most confluence with your other TA tools.