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  1. Home
  2. /Glossary
  3. /VWAP (Volume-Weighted Average Price)
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VWAP (Volume-Weighted Average Price)

An indicator that shows the average price an asset has traded at, weighted by volume.

Definition

An indicator that shows the average price an asset has traded at, weighted by volume. Institutions use VWAP as a benchmark. If you're buying below VWAP, you're getting a better price than average. Trading strategies often go long when price crosses above VWAP and short when it crosses below.

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Related Terms

TWAP (Time-Weighted Average Price)

An order execution strategy that breaks a large trade into smaller chunks spread over a set time period to minimize price impact.

Trading Volume

The total amount of an asset traded over a period, usually 24 hours.

Technical Analysis

Studying price charts and patterns to predict future movements.

Accumulation Phase

A period when smart money quietly buys up an asset before a major price move.

Annualized Return

The average yearly return on an investment, calculated to account for compounding.

Arbitrage

Profiting from price differences of the same asset across different markets.

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