The New VWAP Indicator is a Volume-Weighted Average Price (VWAP) trend-following MT4 indicator. It plots crossovers between the weighted volume averages and delivers precise buy-sell signals for daily forex and stock traders.
The New VWAP Indicator applies three different VWAPs based on daily, weekly, and monthly averages. Depending on the bullish or bearish market conditions, the moving average lines appear in different orders on the chart.
The daily VWAP (yellow) is the fastest moving average of the indicator. It shows you the short-term dynamic support/resistance levels and the current trend conditions. On the other hand, the green and red moving averages signal the long-term trend conditions and projects upcoming price swing points.
Buy Signal Generation with Volume Weighted Average Price Indicator
The daily VWAP moves above the weekly and monthly averages when the market trend turns bullish. Once you determine a solid uptrend condition, look for relevant price-action signals near the yellow line for a buy confirmation.
During a steady bullish market, you’ll find the price mainly rebounds from the VWAP dynamic supports to rejoin the current bullish surge. So, place buy orders on a bullish reversal signal at the daily moving average line.
After triggering long, place SL below the weekly or monthly VWAP lines. Also, you can trail the stop-loss limits following the position changes of the daily average level.
The red line drops below the green, indicating a long-term bearish trend. However, before activating short, we must ensure the short-term trend is also under a bearish condition.
During an overall downtrend, you’ll find the daily VWAP line takes the lowest position compared to other moving averages. After confirming a solid downtrend, look for bearish price reversal signals like pin bars, engulfing, or false-break patterns below the daily average line.
After going short, place the SL above the weekly or monthly VWAP line. Also, consider a sell-exit right after the price exceeds the weekly moving average.
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