Anchored VWAP (Volume-Weighted Average Price) allows traders to calculate the average price weighted by volume from any specific point in time, such as a major high, low, earnings event, or market open. Unlike the standard session VWAP that resets daily, anchored VWAP persists from the chosen anchor point, revealing the average cost basis of all participants who traded since that event and creating dynamic support and resistance levels.
Anchored VWAP calculates the cumulative volume-weighted average price from a user-selected starting point. Common anchor points include swing highs, swing lows, earnings releases, and breakout candles. Price above the anchored VWAP means the average participant from that point is profitable; below means they are at a loss. Multiple anchored VWAPs from different events create a web of institutional reference levels. The indicator dynamically adjusts as new volume data is incorporated. Confluence of anchored VWAP with traditional support and resistance creates high-probability reaction zones.
Enter long on a bounce from an anchored VWAP drawn from a significant swing low. Enter short on rejection at an anchored VWAP drawn from a significant swing high. Trade breakouts when price crosses through a major anchored VWAP with strong volume. Use anchored VWAP from the most recent earnings or news event as a sentiment reference level.
Target the next anchored VWAP level in the direction of the trade. Stop beyond the anchored VWAP that provided the entry — a decisive close past the VWAP invalidates the level. Exit if price consolidates around the anchored VWAP without directional momentum. Use the gap between anchored VWAP and price as a mean-reversion signal when extended.
1H, 4H, Daily
Anchored VWAP is one of the most underrated technical tools available because it reveals the true average cost basis of market participants from any chosen event. When several anchored VWAPs from different time periods converge at a single price level, it creates exceptionally strong support or resistance. Many professional traders use anchored VWAP as their primary analysis framework.
Volume Weighted Average Price (VWAP) represents the average price an asset has traded at throughout the session, weighted by volume. It serves as a dynamic intraday fair-value benchmark used by institutional traders to gauge execution quality. For retail traders, VWAP acts as a powerful support/resistance level and trend filter — price above VWAP suggests bullish intraday bias, while price below suggests bearish bias.
The Accumulation/Distribution Line measures the cumulative flow of money into and out of an asset by examining where price closes within its range relative to volume. Unlike OBV, which only considers whether the close is up or down, the A/D Line weights volume by the close's position within the bar's range, giving a more nuanced picture of buying and selling pressure.
The Klinger Volume Oscillator (KVO) measures the long-term trend of money flow by comparing volume to price movement direction. It calculates a volume force based on the relationship between the high-low range, close, and volume, then applies two exponential moving averages to create an oscillator. The KVO is particularly useful for identifying divergences between volume flow and price, signalling potential reversals before they occur.
On-Balance Volume is a cumulative volume indicator that adds volume on up days and subtracts it on down days, creating a running total that reveals whether volume is flowing into or out of an asset. Developed by Joe Granville, OBV often leads price — a rising OBV during a consolidation suggests accumulation, while a falling OBV during a hold signals distribution. The direction of OBV matters more than its absolute value.