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Anchored VWAP Explained

Anchored VWAP is a VWAP that begins from a chosen starting point instead of resetting automatically at a session boundary.

Anchored VWAP starting from a swing low and major breakout candle

The short answer

Anchored VWAP asks: from this important event, where is volume-weighted value now?

Why Anchor VWAP?​

Regular VWAP usually resets by session or period. Anchored VWAP lets you choose the event that matters.

Common anchors include:

  • session open;
  • weekly or monthly open;
  • swing high or swing low;
  • breakout candle;
  • earnings or news event;
  • liquidation low or high;
  • start of a strong trend leg.

The anchor creates a value reference for everyone who participated after that point.

How Traders Interpret Anchored VWAP​

Price above an anchored VWAP suggests participants from that anchor are, on average, in profit. Price below it suggests they are, on average, under pressure.

This can make anchored VWAP act like:

  • dynamic support;
  • dynamic resistance;
  • a magnet after extension;
  • a line of control after a major move.

Good Anchors vs Weak Anchors​

A good anchor usually marks a meaningful change in behavior.

Better anchors:

  • major swing high or low;
  • breakout from a long range;
  • high-volume reversal;
  • important session or weekly open;
  • visible news shock.

Weaker anchors:

  • random candles;
  • every small local pivot;
  • anchors chosen only because they fit the current trade idea.

Using ZenAlgo​

Levels keeps historical VWAP references visible so old value levels can be retested. Golden Vein combines multiple anchored VWAPs into one value overlay and state table.

Multiverse helps compare VWAP value across daily, weekly, monthly, quarterly, semi-annual, and yearly horizons.

Practical Checklist​

  1. Why does this anchor matter?
  2. Did the anchor begin a new trend, range, or event?
  3. Is price above or below anchored value?
  4. Has the anchored VWAP been respected before?
  5. Is price stretched away from it?
  6. Does the current regime support mean reversion or continuation?

Continue Learning​

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Risk notice

Anchored VWAP depends on anchor selection. If the anchor is arbitrary, the reading can become confirmation bias.