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Trading & Technical Analysis

VWAP

Also called: volume weighted average price, VWAP benchmark

VWAP is the average price weighted by volume over a period, and it's both an execution algorithm and the benchmark institutional traders are graded against. Beating VWAP means you executed better than the day's average participant. Because it's such a common benchmark, large VWAP orders create predictable intraday flow that faster participants trade around.

Formula

VWAP = Σ(Price × Volume) ÷ Σ(Volume)

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