VWAP

How do I read VWAP?

• Price above VWAP = the average buyer (weighted by volume) is in profit, signalling intraday bullish bias.
• Price below VWAP = average buyer is at a loss, signalling intraday bearish bias.
• Slope direction matters: a rising VWAP throughout the session means buyers controlled flow. A falling VWAP means sellers did.
• VWAP often acts as dynamic intraday support and resistance: bounces off VWAP from above are common in uptrending sessions.
• Distance from VWAP gauges 'stretch': price 1% above VWAP on a fast move is overextended for most assets and timeframes — expect mean-reversion toward the line.
• VWAP resets at session open. The first 30–60 minutes of any session produce noisy VWAP readings since not enough volume has been weighted yet.

How is VWAP calculated?

VWAP weights each bar's price by its volume, accumulating both totals from the session open and dividing at every bar.

1. 1.For each bar, compute the typical price: (high + low + close) / 3.
2. 2.Multiply typical price by the bar's volume — this is the price-volume product.
3. 3.Sum the price-volume products from the session open to the current bar.
4. 4.Sum the volumes over the same period.
5. 5.VWAP = sum(price × volume) / sum(volume). Reset both sums to zero at the start of each new session.

What are the default VWAP settings?

How do I plot VWAP in Pine Script?

//@version=5
indicator("VWAP Example", overlay=true)

src = input.source(hlc3, title="Source")

vwapValue = ta.vwap(src)

plot(vwapValue, title="VWAP", color=color.orange, linewidth=2)

Pine's ta.vwap() automatically resets at the start of each session — no manual cumulative tracking needed. The default source hlc3 (typical price) matches the textbook VWAP formula. Plot it on the price pane (overlay=true) so the line draws directly through the candles. For more advanced anchored VWAP, use ta.vwap(src, anchor) with a custom anchor condition.

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