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VWAP (Volume Weighted Average Price)

VWAP divides total traded value (price multiplied by volume at each transaction) by total traded volume over a defined window, usually a single trading session starting at the Asia open. The result is a single price line that reflects where the bulk of activity has taken place, weighted toward the levels with the heaviest participation.

Because it incorporates both price and volume, VWAP sits closer to the "fair value" participants have actually transacted at than a simple price average would. Institutional desks and algorithmic execution systems use it as a benchmark: executing at or better than VWAP is a common standard for measuring how well a large order was filled without moving the market.

On a price chart, VWAP tends to act as a dynamic reference level: markets often rotate around it during balanced sessions and use it as resistance or support during directional ones. Like all price-derived measures, it is a descriptive tool — it describes where activity has concentrated, not where price will go next.