Formula
TP = (H + L + C) / 3
VWAP = sum(TP * V) / sum(V) since the anchor (UTC day by default)
sigma = sqrt( sum(V * (TP - VWAP)^2) / sum(V) )
Bands = VWAP +/- k * sigmaHow TraderAI calculates it
TraderAI uses the typical price (high + low + close) / 3 and restarts VWAP at each UTC day by default; you can also anchor it to a UTC week or month, a chosen time, a trading session or an economic release. The default bands sit 1 volume-weighted standard deviation away. VWAP needs volume confirmed by the exchange: where the data source cannot confirm it, the indicator stays unavailable instead of using estimated volume.
Live example
How traders read it
Price above VWAP means participants who bought since the anchor are, on average, in profit at that moment; below VWAP, on average at a loss. Many intraday traders use it as a fair-value reference.
A return to VWAP after a move away is often watched as a test of that reference, and the bands show how stretched price is from the volume-weighted average.
Comparing VWAP from different anchors, such as the day and the week, shows which group of participants is ahead.
Limitations
- VWAP depends entirely on its anchor; a different anchor gives a different line.
- It is only as reliable as the volume behind it, which is why TraderAI does not calculate it from estimated volume.
Settings and defaults
| Setting | Default | Allowed range |
|---|---|---|
| Source | Typical price | Open, High, Low, Close, High-low average, Typical price, OHLC average |
| Anchor | UTC day | UTC day, UTC week, UTC month, Chosen time, Session, Event |
| Multiplier | 1 | 0 to 10 |
| Band method | Volume-weighted deviation | Percentage, Volume-weighted deviation |
What it plots
Drawn on the price chart, on the same scale as the candles.
| Line | Unit | Drawn as | First value |
|---|---|---|---|
| Middle | Price | Line | after 1 candles |
| Upper | Price | Line | after 1 candles |
| Lower | Price | Line | after 1 candles |
Calculation notes
- Needs volume confirmed by the exchange. On data sources that cannot confirm it, TraderAI keeps this indicator unavailable instead of estimating volume.
Questions
What is VWAP?
VWAP (Volume-Weighted Average Price) is the average traded price since an anchor, where each candle counts in proportion to its volume. It shows the price around which most volume since the anchor changed hands, and its bands show how far price has spread around that average.
How does TraderAI calculate VWAP?
TraderAI uses the typical price (high + low + close) / 3 and restarts VWAP at each UTC day by default; you can also anchor it to a UTC week or month, a chosen time, a trading session or an economic release. The default bands sit 1 volume-weighted standard deviation away. VWAP needs volume confirmed by the exchange: where the data source cannot confirm it, the indicator stays unavailable instead of using estimated volume.
What are the default settings of VWAP?
The defaults are Source: Typical price, Anchor: UTC day, Multiplier: 1, Band method: Volume-weighted deviation. You can change every setting on the live chart.
Can I use VWAP for free on TraderAI?
Yes. Every indicator in the library can be added to the free live chart. The free plan keeps up to 2 indicators active at the same time; Pro lets you combine more on one chart.
Educational content. Indicators describe past prices; they do not predict future prices and are not investment advice.