• VWAP MT4 Indicators: The VWAP indicator is actually the Volume Weighted Average Price indicator for the forex market and it shows the average true price of a currency pair, weighted by volume.
• Supported Pairs: Major Currency pairs
• Trading Time: Lond / Newyork market open
• Timeframe: 1 Minute to 5 Minutes Strictly
• Recommended Broker: Robo-Forex MT4 Platform
• How to Apply? VWAP vs Moving Average The traditional moving averages, as you probably know, are based on the closing prices. Therefore, they represent the closing price of a financial asset or currency pair. On the other hand, the VWAP continuously plots the average price at the weighted volume. As these calculations are ongoing, many traders find it to be a more precise and reliable indicator, better reflecting price action. They believe that volume is an important variable in confirming trends, trend reversals, supports & resistances, breakouts.

Formula

The calculation for the volume weighted average price (VWAP) is following;

VWAP= ∑Typical Price * Volume / ∑Volume

The typical price is the average of the High, Low, and Close of a chosen period. Next, the typical price is multiplied by the volume. This value alongside the volume for that session is calculated. These are known as cumulative volumes and cumulative typical price times volume (TP x V). The last calculation is dividing the cumulative TP x V by the cumulative volume to recive the volume weighted average price for a given period.