✓ Mathematical
◆ The PatternVolume-Weighted Average Price = Σ(Price × Volume) / Σ(Volume).
Volume-Weighted Average Price — the institutional benchmark for trade execution quality.
VWAP = Σ(Typical Price × Volume) / Σ(Volume)
Typical Price = (High + Low + Close) / 3
Typical Price = (High + Low + Close) / 3
Resets at the start of each trading day (intraday indicator).
Interpretation:
• Price > VWAP → buyers in control, upward pressure
• Price < VWAP → sellers in control, downward pressure
• Algorithmic traders use VWAP to minimize market impact
• Price > VWAP → buyers in control, upward pressure
• Price < VWAP → sellers in control, downward pressure
• Algorithmic traders use VWAP to minimize market impact
Pattern bridge: Volume-weighted price is attention over the trading day — each price weighted by how much the market cared. In statistics, it’s a weighted mean.