Mooers' Strategies: Master the VWAP indicator

Hi, mooers!

Welcome back to "Mooers' Strategies"! In the latest Technical Analysis Challenge, we introduced the Volume-Weighted Average Price (VWAP) indicator. Today, we compiled some of the best posts to help you develop your own trading strategy with VWAP. Let's take a look!

*All contents such as comments and links posted or shared by users of the community are the opinion of the respective authors only and do not reflect the opinions, views, or positions of Moomoo Financial Inc., Moomoo Technologies, any affiliates, or any employees of MFI, MTI or its affiliates. Please consult with a qualified financial professional for your personal financial planning and tax situations. Any testimonials provided herein may not represent other customers' experience, and there is no guarantee of future performance or success. Your experience may be different than the ones represented here.

1. What do mooers think of VWAP?

"The key to VWAP is using it as a level of interest. How do I know? VWAP is in my name." -- @Mr VWAP

"VWAP allows traders to to get a better understanding of the overall market sentiment and price trend. It also can help traders execute trades at better prices than average prices." -- @RidingTheWave

"The interesting thing about VWAP is it doesn't change across all minute chart time frames and is the only indicator that is able to do that." -- @protraderx

2. How do mooers make the most out of VWAP?

VWAP slope matters -- @Mooney Navigator

"With VWAP it is important not just to look at whether the current price is above or below it, but what the slope of the VWAP line is. The slope provides a good indicator of momentum.

Remember VWAP is based on historical data and is backward looking.

The VWAP can also be combined with moving averages to create trading signals when the two lines cross.

Bollinger Bands are another indicator that can be combined with VWAP. When actual prices are trading outside of the bands, it is an indicator that these trades come at light volume and the current price may revert towards the VWAP line. ." View full post >>

VWAP + RSI -- @RidingTheWave

"When used in conjunction with VWAP, RSI can help traders identify potential trading opportunities by analyzing a security's price concerning VWAP, along with its overbought or oversold RSI reading. For instance, if a security's price is well above VWAP, and RSI is above 70, it could indicate a short position entry signal. Conversely, if a security's price is well below VWAP, and RSI is below 30, it could suggest a long position entry signal. In addition, it is crucial to monitor price action, even when the two indicators point in the same direction."

VWAP + MACD -- @bullrider_21

"The VWAP can be used with other indicators such as the MACD to confirm a trend. The bullish MACD crossover confirmed the uptrend and gave a buy signal." View full post >>

*For illustrative purposes only. Not a recommendation of a specific security or investment strategy.

3. Mooers may also give you a heads-up that...

"The disadvantage of VWAP, like any other indicators, is that it is only a reference. You should only be using it to find levels of interest. You do not use it as a signal to buy or sell. Finally, there are other concepts on VWAP such as "VWAP pinch", a pullback to VWAP, etc. I'll give credit where it is due. Readers may want to refer to the works of Mr. Brian Shannon." -- @Mr VWAP

"While some institutions may prefer to buy when the price of a security is below VWAP, or sell when it is above, VWAP is not the only factor to consider. In strong uptrends, the price may continue to move higher for many days without dropping below VWAP at all or only occasionally. Therefore, waiting for the price to fall below VWAP could mean a missed opportunity if prices are rising quickly." -- @bullrider_21

The Awards

Hats off to @bullrider_21 @Mcsnacks H Tupack @steady Pom pipi @protraderx @Talented Mr Ripley and @CasualInvestor for posting and interpreting analytical charts! Each of them will be awarded a $5 stock cash coupon. All mooers who post an analyzing post/comment will receive 88 points.

*You must have a brokerage account with Moomoo Financial Inc. to redeem cash coupons. Points and cash coupons may be redeemed only through the moomoo app and have no other value.

*Moo Points may be redeemed only through the moomoo app and have no other value.

Want to learn more about VWAP? Though the event is over, you can still tap here to discuss with other mooers. See you soon at our next TA challenge event!

Disclaimer:

This presentation discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security.

Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only. Read more