Learn about an Indicator today - AVWAP

vanathi Mod Updated   
There are plenty of indicators traders use to help them to make trading decisions. Every trader have their favourite indicator/indicators. What is your favourite indicator? Write it in the comment.
We are going to know about the indicator AVWAP(Anchored Volume Weighted Average Price) in this post.
What is the speciality of AVWAP?
We can place it anywhere in the chart. From that place VWAP will begin.
I have taken bank nifty chart here as an example. In daily time frame I have seen a pin bar which is taking support from the trend line.
Now I have selected AVWAP from the trend line tools. I am placing it on the pin bar. We got the pin bar on feb 8.
How to use it in trading?
Reduce the time frame to 30 mins. From 9th the price is trading above the AVWAP bands. If price is trending above the middle band it is mildly bullish. Above all the band means bullish. Below the middle band means mildly bearish. Below all the band means bearish.

Now take 15 mins time frame. See how the price is bouncing up, taking the support of the upper band. Feb 10th price took good support from the upper band. Traders use different observation on the indicators they use, what I have written is just one observation about how to use AVWAP indicator in trading.

Let me give you another example.
This is the daily chart of tatasteel. I have placed AVWAP on Jan 27. Now reduce the time frame to 30 or 15 mins to get the trading opportunities.

Always use all the knowledge in making any trading decision. Indicators wont be right 100 % as market is dynamic.

In BN chart price is taking trend line support and in tatasteel price is taking support in daily time frame. In addition to that I have used AVWAP to get more edge in trading.

Back test and check in live market, before you use this indicator for trading. It will boost your confidence.
BN in smaller time frame.
AVWAP uses volume to plot the bands. So pls check it in nifty, BN futures chart or stocks. You cant plot AVWAP in nifty, BN spot charts as it dont have volume.
This is my 2000 th idea. Thank you readers for supporting me to write these many posts.

Roles I play here : Author, Analyst & Moderator.

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