A stock gaps up on strong earnings. The daily VWAP for Day 2 is irrelevant because the real volume-weighted average price that matters is from the earnings gap candle on Day 1. Without an anchor, you are trading blind.
Major swing highs and lows represent natural turning points where market psychology shifted. By anchoring a VWAP to a significant swing high, the line becomes dynamic resistance from that pivot. Anchoring to a swing low creates dynamic support.
When a stock breaks out on massive volume following an earnings report, anchor your VWAP to the launch candle. As the stock rallies and eventually pulls back, institutional buyers frequently step back in at their original average cost basis. Wait for the price to touch the Anchored VWAP, look for a bullish reversal candle, and enter long with a stop-loss just below the AVWAP line. 2. The Double Anchor Pinch
Look for a bullish reversal candle (e.g., a hammer or engulfing pattern) on the AVWAP line. maximum trading gains with anchored vwap pdf better
Before risking real capital, test your AVWAP strategy. Backtesting an anchored VWAP strategy on a liquid instrument like ES Futures (S&P 500 E-mini) over a period of 2,762 trades revealed a .
Traditional VWAP is a fantastic intraday tool, but its major flaw is that it forgets everything at the market close. If a company has massive earnings on a Tuesday, by Wednesday afternoon a regular VWAP has completely lost track of the average buyer's cost basis from that catalyst.
Place your stop-loss just below the recent swing low or beneath the AVWAP line. Strategy 2: The Pinch Play (AVWAP + Moving Averages) A stock gaps up on strong earnings
Look for intersections where your Anchored VWAP aligns with high-volume nodes on a Volume Profile. Combined, these zones create nearly unbreakable market levels.
the indicator on a specific platform (e.g., TradingView, ThinkOrSwim). Share public link
When price hits +2σ on the 15-minute chart anchored to the daily low, scale out 50% of your position. Wait for price to revert to the AVWAP line to re-enter. This churn maximizes your share count without adding risk. Major swing highs and lows represent natural turning
Avoid cluttering your screen with dozens of anchors. Stick to the two or three most critical structural events on your current timeframe. To help refine your charting setup, tell me:
allows you to select a specific starting point (or "anchor")—such as a significant high, a low, a gap, or a massive earnings event. The indicator then calculates the volume-weighted average price from that precise moment forward. Key Benefits of Anchored VWAP:
It combines all three vital market variables.