Anchored VWAP

The Anchored VWAP plots the volume-weighted average price accumulated from a bar you choose rather than from an automatic session reset, so the line tracks the average cost of all trading since a chosen event: an earnings release, a swing low, a breakout bar. Optional bands place standard deviations around the average to frame stretch. A standard implementation: one anchor, one line, optional bands.

How to Trade the Anchored VWAP?

• Price above a rising AVWAP from a major low: buyers since that low hold, on average, winning positions. Pullbacks into the line attract dip buyers.
• Price below a falling AVWAP from a major high: the average buyer since the anchor is losing money. Rallies into it often stall as those positions exit near breakeven.
• Cross of the AVWAP: the close moving through the line flips which side of the average cost price trades on, weightiest at widely watched anchors.
• Band touches (Bands enabled): a reach to the Upper or Lower Band marks a full multiple of standard deviations from the mean, context for fades or trailing exits.

The line is a reference, not a barrier: price crosses anchored averages routinely, so treat a touch as a place to evaluate rather than a signal. Alert conditions Price Crossed Above AVWAP and Price Crossed Below AVWAP cover the cross in both directions.

Anchored VWAP Settings

• Anchor time (default 01 Jan 2024): where accumulation begins, set by clicking a chart bar when the indicator is added; the line never resets on its own. Reposition the anchor to restart it.
• Source (default hlc3): the price being volume-weighted; close aligns the line with close-based tools.
• Bands (default disabled): draws standard deviation bands around the AVWAP with a soft fill between them.
• Multiplier (default 2.0): standard deviations for the bands. Higher isolates rare extensions, lower gives frequent, weaker touches.

Frequently Asked Questions

How is Anchored VWAP different from session VWAP?

Where should I place the anchor?

Why does the line look unstable right after the anchor?