VWAP
The day’s average price, weighted by how much traded at each price. It resets every day.
4 minLesson 5 of 102 questions at the end
Key ideas
- 1VWAP is the average price of every trade today, where bigger trades count more.
- 2Lance Trade’s chart starts VWAP fresh at 00:00 UTC each day.
- 3Price above VWAP means buyers today have paid more on average than the day’s typical price; below means less.
- 4It is most useful on short timeframes within a day; on daily candles it means little.
How it works
Formula
VWAP = Σ(typical price × volume) ÷ Σ volume
Typical price = (high + low + close) ÷ 3, summed from 00:00 UTC.
VWAP is the average price traded today, where prices with more volume count more. It starts again at the beginning of each UTC day.
VWAP on 15-minute candles
Made-up candles over a few days. The dashed lines mark 00:00 UTC, where VWAP starts again.
Made-up 15m candlesWorked out like Lance Trade’s chart
O 104,098H 104,240L 103,590C 103,744VWAP 103,642
Reading it
- Price above VWAP: today’s buyers are, on average, ahead. Below: behind.
- Many traders watch it as a reference within the day.
- It is meant for short timeframes: on daily candles it starts again every candle.
What it can’t do
Common mistakes
- Using VWAP on daily or weekly candles. It resets every day, so there is nothing to average.
- Treating it as a level that must hold. It is a reference, not a barrier.
Check yourself
Question 1 of 2
When does Lance Trade’s VWAP start again?
Keys 1 to 3 pick an answer, Enter checks it
Try it in Lance
Switch the chart to 15m, add VWAP from Indicators and watch it start again at midnight UTC.
Add VWAP on 15m