Hey everyone! Sean Here at War your trading and today we're going to cover what the Vwap is and how you can use it in your trading. The Vwap stands for volume weighted average price and is calculated by taking the number of shares bought times the share price divided by total shares bought. It is the average value of a stock traded over a set time which is typically one day and it's used as a benchmark by Major funds and institutional traders who are placing large orders. They use it as a way to determine if they were efficient in placing their order.

So if they are placing a large buy order then they want to get prices below the Vwap and if they can do that then they did a good job and got good prices. The same goes for sell orders except they would want to get those prices above the Vwap. So to break it down, the Vwap is a moving average based on volume instead of price like most moving averages and this gives Traders great Insight in where most of the action is happening. The View app is a very important tool and is used in a lot of different strategies for active Traders It's great for seeing Market sentiment and usually the longer prices hold above or below the Vwap the better chance it will have to continue in that direction.

It can act as a strong support and resistance level as a lot of Traders watch and trade against it. Um, when it's plotted on a chart, the Vwap looks like a moving average. Uh I have it here. uh in white and you can see it looks just like the uh.

other moving averages. uh except it's a lot slower like this is the the Blue Line's the 20 EMA and the White's the the Vwap and you see it's a lot slower. So um let's go over a couple examples of how you can trade with the Vwap. Uh, we had.

We had a couple good looks yesterday on it. Uh, this is DDS Dillards and this is a good setup. This is something I look for every day and what we had here was a strong opening drive on high relative volume. Uh and what I look for in this type of setup is a pull back to the Vwap where it should act as support and as you can see on this 5 minute chart it held the Vwap three times before making the next leg up.

Once you see the Vwap acting as support, you want to look to taking a long position on a breakout above the previous previous candle highs and then using the low of the pivot as a stop or it closed below the V app. Uh, if either of those happen then I'm going to exit the trade but this one worked out perfectly. Uh, got long and um, it had a nice leg up on the Uh on the second leg here here and we were able to add through highs in this area and uh, you know, take profit along the ways and I think it got stopped on the rest around here. So this is, uh, this one worked out perfectly.

um and something you'll want to look for in the morning. Usually you look for a stock with a catalyst, some kind of news that's going to give uh, you know, put it in front of a lot of Traders um and then you get that volume that you need for for the continuation. So let's look at another example here. we had Stz Uh, this is a different look uh, but can be just as powerful as the momentum one.

So this one there was Heavy consolidation. Uh, just below the Vwap and as you can see, I tried to break above the Vwap a handful of times only to fail and come back below. Uh, this is a tight consolidation play and since it's consolidating under the Vwap, you want to look for a continuation in that direction. Ction, uh, we finally got it here.

Uh, when the 20 EMA crossed over the Vwap later in the morning and and I mean then look what happened. Price has just, uh, melted away for the rest of the day on what turned out to be a relatively stressfree trade. So, and you just looked to take profits along the way. And what's great about this setup is you know exactly where your risk lies.

Uh, which would be you know above the consolidation up here or a close above the Vwap as well. Um, so those are a couple different ways you can look at trading with the Vue app. Um, both work great most of the time and uh, something you guys should look at into your playbook. All right.

if you have any questions, uh, leave us a message in the comments below. See you guys next time. Oh hey I didn't see you there well I Was just working on the dream board for my next home run trade. Hopefully it comes soon.

Until then, make sure you subscribe to get email alerts anytime I Go live or upload new videos. Until then Happy Surfing.