The indicator begins calculating at the open and stops calculating at the close. Even though it is primarily used on an intraday basis, there can still be a great deal of lag between the indicator and price. When price is above the VWAP, the trend is up and when it's below the VWAP, the trend is down. It's a solid way of identifying the underlying trend of an intraday period. The Volume Weighted Average Price is an interesting indicator because unlike many other technical analysis tools, it's best suited for intraday analysis. Sideways Market is characterized by prices trading above and below the VWAP. The premise is very straightforward but can be very useful, especially when used for confirming trading signals.Р”В«ullish Trend is characterized by prices trading above the VWAP.Р”В«earish Trend is characterized by prices trading below the VWAP. Trend Identification is a major benefit of using the Volume Weighted Average Price indicator. For example, if you select a weekly interval, the sum of the values will accumulate starting from the first trading day of each week. VWAP can be used over any time frame: intraday (seconds, minutes, hours), week, month, year, decade, century. Lag is inherent in the indicator because it's a calculation of an average using past data. Keep in mind, however, that much like a moving average, VWAP can also experience lag. The Volume Weighted Average Price indicator is similar to a moving average in that when prices are advancing, they are above the indicator line and when they are declining, they are below the indicator line. VWAP = Cumulative(Typical Price x Volume) / Cumulative(Volume)

Create a Cumulative Total of Typical Price.

Multiply the Typical Price by the period Volume.

Calculate the Typical Price for the period.There are five steps in calculating VWAP:

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