
Zach Hurwitz, Founder of TheVWAP
Volume-weighted average price has gained popularity in recent years, but very few traders use it properly.
Our strategy incorporates additional concepts like standard deviation bands and longer-term VWAPs to unlock
its full potential.
Not sure what I mean? Let me explain.
Starting simple.
An intraday volume-weighted average price plotted from 9:30am ET to 4:00pm ET is the most common VWAP
that traders use, and it's still pretty powerful on its own.
The manner in which it's calculated and the role it plays in institutional trading — which we discuss in our free eBook — makes it a
driving force in day-to-day market activity.
By maintaining the same initiation point and building upon itself as time progresses, every share
transacted is factored in. Simply put, it's the market's true average price over the entire trading day.
Bring in the bands.
Plotting standard deviation bands alongside VWAP creates a virtual grid system on our charts, through which we
can objectively determine how far we're trading from the market's average price.
Price tends to behave differently at varying distances, and the deviation bands oftentimes serve as
barriers
separating those contrasting regions. The result? Areas of otherwise hidden support and resistance.
VWAP, but make it longer.
One of the biggest misunderstandings about VWAP is that it's only applicable on an intraday chart. In
reality, you can and should be anchoring volume-weighted averages to prior days as well.
Whether it's yesterday's open or a company's last earnings date, long-term VWAPs capture market
sentiment
over a relevant time frame and add invaluable context to our trading as a result.
Sorting through setups.
The combination of these concepts allow us to segment market behavior, make higher probability
assumptions
about upcoming chart movements, and identify areas of support and resistance that can be used for trade
entries and exits.
From there we assess the quality and likelihood of success of potential setups using a variety of
metrics
and methods, including the one shown here — the slope of VWAP.
Flexibility
The impact of VWAP — and as a result our strategy — is not limited to one particular market type. Its widespread
use by institutional traders makes it effective wherever they're conducting transactions, which is ... basically
everywhere.
As long as there's sufficient volume, VWAP should play a role. To be specific, we have members that currently
apply our framework to:
- Futures — ES, NQ, CL, GC, currency Futures, etc.
- Large, mid, and small cap stocks
- Options trading
- Cryptocurrency
Click here to view more chart examples of the markets listed above.

Intraday chart of the E-mini S&P 500 (/ES) from January 1st, 2019 with intraday VWAP and standard deviation bands applied.

Hourly chart of Bitcoin from April 2021, with a VWAP anchored to a recent low from April 7th prior to a one-week uptrend.
Versatility
One of the most clear-cut benefits of VWAP and its associated standard deviations bands may be as support and
resistance levels, but that's not the only role they play in our approach.
While we do utilize them for trade entries, initial/ongoing risk management, and eventual exits, we also rely on
these tools to characterize and contextualize chart behavior, interpret past and current price action, and make
educated guesses about what is most likely to happen next. We incorporate additional concepts like slope and
longer-term anchored VWAPs to help accomplish these objectives as well.
This splits our approach into two separate but related components: strategic assessment and tactical
implementation. Before deciding where, when, and how to enter or exit a trade, it's crucial that you first
determine if the chart you’re looking at is worth trading at all.
Adaptability
The framework we implement is not biased in either direction. We teach four primary trade types — two for trend
continutation and two for countertrend reversion — that each have both long and short applications. The prevailing
market conditions at any given moment will often dictate which trade types are most likely to yield success, and
having the ability to modify your plan of attack accordingly is crucial to long-term success.
So while the tactics you employ (trade type, typical hold time, position sizing, entry/exit criteria, etc) may
change in response to different environments, the underlying concepts that make up our strategy remain in tact.
We continue to assess charts using the same metholodology, and the result of that assessment helps determine how
we proceed.
Click here to view more examples of our approach dating back as
far as 2010, demonstrating the longevity of VWAP and its ability to adapt over time.

Intraday chart of SPY from September 20th, 2010 with intraday VWAP and standard deviation bands applied.

Intraday chart of SPY from April 21st, 2022 with intraday VWAP, standard deviation bands, and the prior day's VWAP applied.