( ) - the average price weighted by , starts when trading opens and ends when it closes. This can help institutions buy or sell in large orders, without disturbing the market.
After buying or selling, institutions compare instrument price to closing values at end of the day.
For big financial institutions;
A buy order executed below the value, considered a good fill because the security was bought at a below average price.
A sell order executed above the would be deemed a good fill because it was sold at an above average price.
Simple price based moving average is not helpful for them; = as it doesn't incorporates traded. Hence - :)
So how it helps us in decoding the IntraDay-trend? - Through a 2 day co-relation.
So, Closing value of previous day = Pvwap
Today's running = Cvwap
Defining the IntraDay Trend:
Moderately = candle closing price above Pvwap but below Cvwap
Super = Closing price is above both (Cvwap and Pvwap)
Moderately = Closing price is above Cvwap but below Pvwap
Super = Closing Price is below both (Cvwap and Pvwap)
A big gap between the Cvwap and the candle closing price defines the strong participation from institutions in that direction. (Strong Trend)
Moving with the smart money, in the overall trend is a wise decision for any intraday trader and this helps at its best.
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.