VWAP stands for Weighted Average Value. The indicator is made up of three lines, each representing daily, weekly and monthly periods. These lines take the total market size and divide it by weight. The VWAP indicator is similar to moving averages or Bollinger bands. The difference between VWAP and moving average is that VWAP focuses more on volume weighted. Calculate the volume-weighted average price. This volume determination can help you find support and resistance levels and thus identify entry and exit points. The indicator signals when weekly and monthly lines are crossed, which offers long and short opportunities. Although the indicator works best on any time frame, it is best used on the hourly chart to avoid creating false signals.
How to trade with the VWAP indicator?
The VWAP indicator highlights the volume-weighted average value. These levels tell you when to enter or exit a trade. The indicator generates a signal when it crosses the weekly and monthly lines. For example, the weekly line is colored red and the monthly line is colored green. If the weekly line crosses the monthly line, this is a bullish signal. On the contrary, it is a bearish signal when the weekly line falls below the monthly line. The daily yellow line serves as a neutral line and you can use it for bearish or bullish trends. This line moves in the direction of the trend. Whenever there is an uptrend, the yellow line goes up. Buy Settings for the VWAP Indicator Setting the VWAP Sell Indicator The VWAP Indicator for MT5 provides accurate entry and exit points with a focus on volume.
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