1. Introduction
A volume-weighted average price (VWAP) is a trading indicator that presents the average price a financial instrument has traded at throughout the day, taking into consideration both volume and price. Providing traders with insights into both trend and value, the indicator is therefore widely used.
This measure helps investors and analysts evaluate the current price of a stock and determine whether it is relatively overpriced or underpriced compared to the average trading price for the day. Often this information is used to facilitate the entry or exit of a position.
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