OUTSMARTING THE REST OF TRADERS
VWAP stands for Volume Weighted Average Price and is used to identify the true average price of a stock by factoring volume into the equation. Ok, VWAP can be used as support and resistance. Pinaka effective na time frame nito is 1 up to 5 mins. Yes, intraday pero I wont talk about using VWAP as a support or resistance right now. Right now I want you to understand what VWAP represents. VWAP shows you kung anu ang average price ng karamihan.
Have you ever experienced yung excited ka mag open ang market and right after nag open eh bumili ka ng lumipad na stock?Then an hour later eh u just watch that stock go down. Green pa rin sya pero red ka na kasi you bought sa taas? Pag open ng market lumipad agad yung stock mga 20 percent. You bought it at that level. An hour later nasa 12 percent na lang sya. Green pa rin sya but you’re down 8 percent na plus tax at fees sa port mo.
By looking at VWAP u will see nasaan ang average na bili ng karamihan. So it might be smart to buy a stock at or below sa average ng karamihan. VWAP will also tell you kung saan ka banda bumili. Nasa tuktok ba or hindi.
VWAP itself is not a strategy but a metric that can be used as a benchmark to trade around. Instead of using last price that can represent a small trade and have a lot of volatility, the volume weighted average price is used to get a smoother and more volume weighted price. If you surf the net you will find a lot of strategies using VWAP. Meron na kapag nabreak ng candle ang VWAP as resistance eh its a buy for them meron din na kapag nabreak ng candle ang VWAP as support eh its a sell for them. I dont do it. VWAP lags price because it is an average based on past data. The more data there is, the greater the lag. VWAP is a cumulative indicator, which means the number of data points progressively increases throughout the day. So what i want you to remember is gawin ninyong metric or pansukat kung nasaan na at that time yung price ng stock compared sa average ng karamihan. Another one is ATP or average traded price. If COL user ka punta ka lang sa quotes lagay mo name ng stock at punta sa traded prices then scroll down sa bottom andun ang ATP. Same din yan na average price ng karamihan. Knowing saan most bumili tips the odds in ur favor BIG TIME.
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