What is VWAP Indicator?

VWAP stands for Volume Weighted Average Price. It is a trading metric used by investors and traders to measure the average price paid per share for a security, such as a stock, over a specified period of time.

The VWAP is calculated by dividing the total dollar amount traded for a security by the total volume of shares traded over a given time period. The resulting value represents the average price paid per share, weighted by the volume of shares traded at each price level.

The VWAP is often used as a benchmark for traders to determine whether they are buying or selling a security at a good price. Traders who buy a security at a price below the VWAP may be getting a good deal, while traders who buy above the VWAP may be overpaying. Similarly, traders who sell a security at a price above the VWAP may be making a profit, while those who sell below the VWAP may be selling at a loss.