Volume Weighted Average Price (VWAP) is a technical indicator that calculates the average price of an asset weighted by trading volume over a specified period. It is widely used by day traders, institutional investors, and algorithmic trading systems to evaluate the fair value of an asset and improve trade execution. The VWAP formula sums the product of price and volume for each period and divides by the total volume. Price input can be the typical price—(High + Low + Close) / 3—or simply the Close price, while volume is the trading volume for each period.

VWAP serves several key functions: it acts as a reference for fair value, where prices above VWAP indicate bullish bias and below indicate bearish bias; it provides dynamic support and resistance levels useful for intraday breakouts and reversals; and it helps confirm intraday trends, with prices sustained above VWAP signaling an uptrend and below signaling a downtrend.

This indicator supports various markets including forex, stocks, indices, commodities, and cryptocurrencies, making it a versatile tool for intraday market analysis and trading strategy development.