What is VWAP?
Volume Weighted Average Price — the institutional benchmark price and how traders use it for entries and exits.
The simple version
VWAP (Volume Weighted Average Price) is the average price a stock has traded at throughout the day, weighted by volume. It resets at market open every day.
Think of it as the "fair price" that most shares actually traded at — not just the midpoint of the price range.
Why institutions care
Fund managers use VWAP as a benchmark. If they bought shares at a price below VWAP, they got a good deal relative to the day's average. Algorithms are often programmed to execute orders at or below VWAP to minimise market impact.
How traders use it
- VWAP as support — in uptrends, price often dips back to VWAP and bounces. Traders use dips to VWAP as entry points.
- VWAP as resistance — if a stock is struggling to break above VWAP, it signals weakness. Sellers are defending that price.
- Above VWAP = bullish bias; below VWAP = bearish bias for intraday sessions.
VWAP on TradeMind AI
VWAP is available as a chart overlay on 1-hour and daily timeframes. It is most useful for stocks with high daily volume. For thinly traded stocks, VWAP can be distorted by a single large trade.
See it in action
Every TradeMind AI signal shows confidence score, entry, stop, target, and R-multiple — all explained with tooltip hints when you hover the term.