VWAP (Volume-Weighted Average Price) - Forex Glossary | ForexCracked
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Indicators & Analysis Advanced

VWAP (Volume-Weighted Average Price)

Also called: VWAP

The average price weighted by volume traded at each level — institutional benchmark for fair value.

01

Definition

VWAP is the running average price weighted by the volume traded at each tick. Institutions use it as an execution benchmark — fills better than VWAP are ‘good’, worse are ‘bad’.

In FX, true volume is approximated by tick volume (no centralised exchange), so VWAP is more reliable on futures and equities. Still useful as a mean-reversion anchor intraday.

03

Formula

VWAP = Σ(Price × Volume) / Σ(Volume)