Welcome! Take your time with the course and indicators and then hope to see you in the chatroom whenever you're feeling more comfortable with all of the material.
You don´t have an idea about the indicator that he´s offering, its a very powerful vwap + stdev bands, one of the most powerful statistical measure in the world.
Thank you Zach. No offense but I had to laugh when I realised I could listen to you speaking at 1.75x. I love VWAP too. It's great to see someone speaking so highly of it. Let's get some more Vwapians on board! Peace.
{ Did this dude just say _"V-wapians"_ ?!? Yo, I'm pretty sure that this is the part of the movie where the spaceship lands, and their facemasks come off. }
Hi Zach, Institutional traders use VWAP to gauge trade executions and true VWAP is calculated as “price of every trade * volume of every trade”. However, there are many discrepancies in how VWAP is calculated on many retail trading platforms. For example, some only use regular market hours vs. some incorporate pre-market. Some use the true VWAP (the price of every trade * volume of every trade) vs. some use approximate VWAP (average of high, low, open, and close of the bar * volume of the bar). Some use 1-minute bars vs. some use other intervals. Some update their VWAP once per minute vs. some update it in other intervals. Do institutional traders use the true VWAP or an approximation? If the latter, then which approximation do they use? Thanks!
Hey Paul, Sorry about the delay. I haven't checked our TH-cam comments in a couple of days. Good point! Inst. traders almost certainly use the 'real' VWAP -- tick level data, VWAP of each bar (not HLC3), etc, but the neat thing for us retail folks is that the ApproxVWAP and RealVWAP are nearly identical. Oddly enough, the VW part (the volume weighting) of VWAP isn't as impactful as the AP part (the average price). That means that small discrepancies in volume from one dataset to another, or slight changes in price (HLC3 vs true bar VWAP) really only adjust the end-result VWAP very minimally. Of course, I can imagine circumstances where this isn't the case, but I'd be confident it applies (the vast majority of the time, at least). If you want to test this out, you can create a side by side comparison of approximate VWAP (using HLC3, for example) vs. 'pure' VWAP and note how small of a disparity exists by the end of a given day. They're nearly identical unless the initiation point (or component volume) is wildly different between the two.
@@thevwap Thank you for the reply! As a follow-up, I wonder 1. Do institutional traders use pre-market data in their "real VWAP" calculation? Or do they use pre-market data (4 am to 9:30 am) if they trade pre-market, and then switch to a version of the VWAP that starts its calculation at 9:30 am? 2. When retail investors calculate approximate VWAP, is it the standard to use the 1-minute candles' HLC3 and volume across all time frames? or does a 5-minute chart use the 5-minute HLC3 and Volume, a 30-minute chart use the 30-minute HLC3 and Volume, etc? Thanks again!
@@MrPaulzeng No problem! 1. The vast majority of the time, the amount of volume traded in pre-market pales in comparison to the volume traded in even the first half hour of regular trading hours. And given that VWAP is volume-weighted, that surge of volume will typically drown out anything transacted in pre-market and the two versions of intraday VWAP (pre-market included and excluded) will quickly align and become the same value. So in a lot of cases, it won't end up mattering whether pre-market data is included. The obvious exception would be earnings reports, pre-market news, or anything else that results in a relatively high amount of volume to be transacted during extended hours. In those situations, it often makes sense to include pre-market trading in the calculation. 2. Using a 1-minute HLC3 will give you the best approximation of an all-inclusive VWAP, but even still it can fall short. On the platforms I've seen that use HLC3, the value of VWAP will change depending on what timeframe you're using. So a 5-minute chart would use the high, low, and close of its respective candles, a 30-minute chart would use its candles, and so on. Our indicators all use "true" VWAP for that exact reason, as that VWAP will remain consistent across timeframes.
@@thevwap Got it, thank you, Zach! Also, I bought your course yesterday, am looking forward to going through it. Blast to others who read this, here's Zach's course: thevwap.com/vwap-on-demand/ Grab yours!
Hey Prem, The full eBook that's discussed in the video is available at thevwap.com/vwap/, but there's not necessarily a full-length research paper to review. One resource that we recommend for traders who really want to do more extensive research is a book called "MIDAS Technical Analysis: A VWAP Approach to Trading".
Before I buy this tool kit indicator should I ask proof of the money you did last month, where I can see that, It’s beautiful on the screen but in reality … because $500 for something that is already on ACP … not sure without proof of this value! Tks anyway!
Hey Eric, I'm not sure what platform you're referring to when you say "ACP", but the exact indicators included with VWAP On-Demand are not available elsewhere. There's certainly some nice alternatives out there that can be effective, but we've added a lot of personalized features to all of our code that our members find to be helpful. Also, our custom indicators are only one part of the entire package. You also receive over eight hours of video modules, a chart gallery full of examples, access to our chatroom and the tools it includes, and direct access to our support team for any questions you may have. And for what it's worth, anyone who signs up for our free toolkit is also offered a $200 discount on VWAP On-Demand. Our Intraday indicator that I believe you're referencing is entirely free for anyone who signs up for that toolkit, as well as some additional free resources. Appreciate you watching, and if you have any other questions you can always reach out to support@thevwap.com. Thanks!
Hey William, I'll just reply to all of your questions here. We typically recommend anchoring longer-term VWAPs to days/candles in the past that are likely to have some clear importance. So in some cases that can end up being a weekly VWAP, but in other cases it can involve anchoring a VWAP to a different day in the week if that particular day provided a more compelling reason (earning release, unusually high volume, technical gap up/down, etc.) We talk about how to determine the most viable anchor points and how to prioritize different VWAPs in our course. Yes, the course discusses all of our custom indicators and how to set everything up. They include an option to either display or hide deviation bands, and if they're turned on they will automatically calculate and display alongside the corresponding VWAP you're plotting. Are you referring to thinkorswim's built-in VWAP indicator? That only allows for two deviation lines, while our Intraday indicator allows for four (-2, -1, +1, +2). Their version also auto-hides deviation bands by default, so you'd need to turn them on in the indicator settings. Ours displays them by default, given that we consider them to be a crucial complementary piece of trading with VWAP. If you haven't already, I'd highly recommend grabbing our free toolkit at thevwap.com/vwap. You'll be able to download the eBook discussed in this video, as well as free indicators and some additional resources. I hope all of that helps, but feel free to reach out with any additional questions!
Hey, I think we got an email from you a few hours ago with the same question and answered it there, but yeah absolutely. As long as the market has sufficient day-to-day liquidity (ES, CL, NQ, etc.) then everything translates over to Futures as well. Be sure to check out that email we sent back to see a few Futures-specific chart examples as well.
Hey, our custom indicators aren't currently available for MT4. It's possible that they offer some built-in VWAP tools that may replicate some of the same functionality ours provide, but I'm not too familiar with their platform so I couldn't say one way or the other.
Hello Zach! I'm glad you uploaded this video, very informative. I trade off TOS myself and was wondering how you;1) Add 2nd standard deviation on the VWAP?2) Where can I find the "TheVWAP_Aspect" slope indicator? Thanks for the great video!
Hey Aleksey, appreciate you watching. The standard deviation bands are one of the features of our VWAP Intraday indicator. Both Intraday and Aspect are available on our site as either part of a standalone package or included with our full on-demand course. You can find all of the course details - including a section on the custom indicators - here: thevwap.com/vwap-on-demand. Thanks!
Zach, assuming a beginner wants to trade using only the VWAP test or bounce strategy and only looks for longs above VWAP and shorts below VWAP, how should he scan for stocks that are suitable for this kind of set up ? Or is it better to just create a watchlist of several mid / large cap stocks and wait for a set up ? In your experience, do individual stocks “respect” the VWAP more compared to stock index futures like the ES ?
Hey, the most basic way to find those types of trades is essentially what you described. You can create a more refined watchlist and cycle through it over the course of the day to monitor what names are trading above or below VWAP and how far away from it they currently are. But in terms of maximizing efficiency, we're actually nearing the release of our intraday scanner that will identify and alert potential trade candidates right in line with what you're describing, as well as other setups that we teach. There's more info at thevwap.com/scans/. And it's tough to say if individual stocks respect it MORE than the indexes, as we've seen plenty of evidence of VWAP being successfully applied to futures markets like /ES, /CL, etc. We tend to focus more on individual equities given the larger quantity of them, so while it's tough to say if VWAP respects those individual names more I can say that they typically produce more opportunities overall on any given day.
@@stewybagodonuts817 As of right now the scans aren't available, but we're actively working to bring them back in some capacity. If you email us at support@thevwap.com so we have your address of file I can keep you updated when there's more info available.
Really helpful insights. Thank you very much. Around 9:20, re: what it takes to overcome VWAP inertia...wouldn’t it take lots of money and volume (not necessarily time) ?
Yeah absolutely, that's the main point we were looking to make. The longer a VWAP goes, the less responsive it becomes given the amount of volume the underlying stock has inherently traded over that period of time. So as a result, it would then take an atypical price move with significant volume in order to redirect that VWAP in a meaningful way. It helps us determine which price moves are legitimate and sustainable versus which ones will likely revert back towards the average.
Hey Austin, we've seen instances of it being effective on both but we consider it to be much more reliable on stocks that trade with sufficient liquidity (a few millions shares) on a day-to-day basis. However, consistent volume and above-average volatility aren't necessarily mutually exclusive. It has a role to play on some of the stocks you're referring to, but we don't spend much time focusing on penny stocks or lower-float "momentum" stocks so we don't feel comfortable advocating for the use of VWAP and deviation bands on those tickers without having enough visual evidence to strongly support the claim. Thanks!
Hey Mike, in all honestly we haven't spent much time digging into the effectiveness of VWAP on Forex using tick volume as a stand-in for transaction volume. We've always tried to make traders aware of the limitations of VWAP in the Forex markets due to the lack of centralized volume that removes the "volume-weighted" component of the indicator, but it would be interesting to know if tick volume can act as a viable workaround. We don't have many traders focusing exclusively on Forex who reach out to us, but if you do try to experiment with that alternative and have some success then we'd be fascinated to know about it. Thanks!
@@thevwap Thank you for that response...much appreciated. There have been studies that have shown that Tick volume can be a pretty accurate proxy for real volume. VWAP, StDevs and Session Volume Profile have helped me immensely in making sense of price movements and reveals the "move of the day" with such clarity. Fantastic tools!
I've bought the course yesterday, you convinced me last weeks after all the podcasts and videos, Cant wait to dive deeper into this great tool.
Welcome! Take your time with the course and indicators and then hope to see you in the chatroom whenever you're feeling more comfortable with all of the material.
Congrats. Its a great Course very helpful. Hope you're doing well with it.
Update?
@@tsleong1profitable??
Does it worked for you? Please give us review
Lots of folks offering FREE VWAP stuff ... and this guy has the nerve to charge for what you can get for free? LOL!
You don´t have an idea about the indicator that he´s offering, its a very powerful vwap + stdev bands, one of the most powerful statistical measure in the world.
Thank you Zach. No offense but I had to laugh when I realised I could listen to you speaking at 1.75x. I love VWAP too. It's great to see someone speaking so highly of it. Let's get some more Vwapians on board! Peace.
{ Did this dude just say _"V-wapians"_ ?!? Yo, I'm pretty sure that this is the part of the movie where the spaceship lands, and their facemasks come off. }
Stumbled upon this indicator last week and implemented it. I've never felt more comfortable trading. It definitely sheared off some stress!
Way using 20D|5m and 5d|1m, using time factorization why not go at the last Order Block since stocks have volume profile accurately vs Forex?
When I turn VWAP on in Think or Swim, I only get the VWAP, no Diviation band??
Thanks for your generosity 🙏
Woow, this was a master class by an expert. Thanks for this lesson and for the Roadmap !!!!!
Hi Zach,
Institutional traders use VWAP to gauge trade executions and true VWAP is calculated as “price of every trade * volume of every trade”. However, there are many discrepancies in how VWAP is calculated on many retail trading platforms.
For example, some only use regular market hours vs. some incorporate pre-market. Some use the true VWAP (the price of every trade * volume of every trade) vs. some use approximate VWAP (average of high, low, open, and close of the bar * volume of the bar). Some use 1-minute bars vs. some use other intervals. Some update their VWAP once per minute vs. some update it in other intervals.
Do institutional traders use the true VWAP or an approximation? If the latter, then which approximation do they use? Thanks!
Hey Paul,
Sorry about the delay. I haven't checked our TH-cam comments in a couple of days.
Good point! Inst. traders almost certainly use the 'real' VWAP -- tick level data, VWAP of each bar (not HLC3), etc, but the neat thing for us retail folks is that the ApproxVWAP and RealVWAP are nearly identical.
Oddly enough, the VW part (the volume weighting) of VWAP isn't as impactful as the AP part (the average price). That means that small discrepancies in volume from one dataset to another, or slight changes in price (HLC3 vs true bar VWAP) really only adjust the end-result VWAP very minimally.
Of course, I can imagine circumstances where this isn't the case, but I'd be confident it applies (the vast majority of the time, at least). If you want to test this out, you can create a side by side comparison of approximate VWAP (using HLC3, for example) vs. 'pure' VWAP and note how small of a disparity exists by the end of a given day. They're nearly identical unless the initiation point (or component volume) is wildly different between the two.
@@thevwap Thank you for the reply!
As a follow-up, I wonder
1. Do institutional traders use pre-market data in their "real VWAP" calculation? Or do they use pre-market data (4 am to 9:30 am) if they trade pre-market, and then switch to a version of the VWAP that starts its calculation at 9:30 am?
2. When retail investors calculate approximate VWAP, is it the standard to use the 1-minute candles' HLC3 and volume across all time frames? or does a 5-minute chart use the 5-minute HLC3 and Volume, a 30-minute chart use the 30-minute HLC3 and Volume, etc?
Thanks again!
@@MrPaulzeng No problem!
1. The vast majority of the time, the amount of volume traded in pre-market pales in comparison to the volume traded in even the first half hour of regular trading hours. And given that VWAP is volume-weighted, that surge of volume will typically drown out anything transacted in pre-market and the two versions of intraday VWAP (pre-market included and excluded) will quickly align and become the same value. So in a lot of cases, it won't end up mattering whether pre-market data is included. The obvious exception would be earnings reports, pre-market news, or anything else that results in a relatively high amount of volume to be transacted during extended hours. In those situations, it often makes sense to include pre-market trading in the calculation.
2. Using a 1-minute HLC3 will give you the best approximation of an all-inclusive VWAP, but even still it can fall short. On the platforms I've seen that use HLC3, the value of VWAP will change depending on what timeframe you're using. So a 5-minute chart would use the high, low, and close of its respective candles, a 30-minute chart would use its candles, and so on. Our indicators all use "true" VWAP for that exact reason, as that VWAP will remain consistent across timeframes.
@@thevwap Got it, thank you, Zach! Also, I bought your course yesterday, am looking forward to going through it. Blast to others who read this, here's Zach's course: thevwap.com/vwap-on-demand/ Grab yours!
@@MrPaulzeng Happy to have you! Feel free to email with any questions once you've made your way through all of the material.
Is the weekly VWAP best for a weekly swing trader?
Do we have any research paper on VWAP available for diving deep more?
Hey Prem,
The full eBook that's discussed in the video is available at thevwap.com/vwap/, but there's not necessarily a full-length research paper to review. One resource that we recommend for traders who really want to do more extensive research is a book called "MIDAS Technical Analysis: A VWAP Approach to Trading".
@@thevwap thanks a lot for reply.
Before I buy this tool kit indicator should I ask proof of the money you did last month, where I can see that, It’s beautiful on the screen but in reality … because $500 for something that is already on ACP … not sure without proof of this value! Tks anyway!
Hey Eric,
I'm not sure what platform you're referring to when you say "ACP", but the exact indicators included with VWAP On-Demand are not available elsewhere. There's certainly some nice alternatives out there that can be effective, but we've added a lot of personalized features to all of our code that our members find to be helpful.
Also, our custom indicators are only one part of the entire package. You also receive over eight hours of video modules, a chart gallery full of examples, access to our chatroom and the tools it includes, and direct access to our support team for any questions you may have. And for what it's worth, anyone who signs up for our free toolkit is also offered a $200 discount on VWAP On-Demand.
Our Intraday indicator that I believe you're referencing is entirely free for anyone who signs up for that toolkit, as well as some additional free resources.
Appreciate you watching, and if you have any other questions you can always reach out to support@thevwap.com. Thanks!
what is ACP?
Will you show us how to set up the VWAP? How are the Diviations set up? Are they automatic when the VWAP appears?
Hey William, I'll just reply to all of your questions here.
We typically recommend anchoring longer-term VWAPs to days/candles in the past that are likely to have some clear importance. So in some cases that can end up being a weekly VWAP, but in other cases it can involve anchoring a VWAP to a different day in the week if that particular day provided a more compelling reason (earning release, unusually high volume, technical gap up/down, etc.) We talk about how to determine the most viable anchor points and how to prioritize different VWAPs in our course.
Yes, the course discusses all of our custom indicators and how to set everything up. They include an option to either display or hide deviation bands, and if they're turned on they will automatically calculate and display alongside the corresponding VWAP you're plotting.
Are you referring to thinkorswim's built-in VWAP indicator? That only allows for two deviation lines, while our Intraday indicator allows for four (-2, -1, +1, +2). Their version also auto-hides deviation bands by default, so you'd need to turn them on in the indicator settings. Ours displays them by default, given that we consider them to be a crucial complementary piece of trading with VWAP.
If you haven't already, I'd highly recommend grabbing our free toolkit at thevwap.com/vwap. You'll be able to download the eBook discussed in this video, as well as free indicators and some additional resources.
I hope all of that helps, but feel free to reach out with any additional questions!
Nice one Zach. I like to use VWAP with ATR
I totally appreciate you
Can this be used to trade futures also or only stocks?
Hey, I think we got an email from you a few hours ago with the same question and answered it there, but yeah absolutely. As long as the market has sufficient day-to-day liquidity (ES, CL, NQ, etc.) then everything translates over to Futures as well.
Be sure to check out that email we sent back to see a few Futures-specific chart examples as well.
Does it work on Mt4
Hey, our custom indicators aren't currently available for MT4. It's possible that they offer some built-in VWAP tools that may replicate some of the same functionality ours provide, but I'm not too familiar with their platform so I couldn't say one way or the other.
Hello Zach! I'm glad you uploaded this video, very informative. I trade off TOS myself and was wondering how you;1) Add 2nd standard deviation on the VWAP?2) Where can I find the "TheVWAP_Aspect" slope indicator? Thanks for the great video!
Hey Aleksey, appreciate you watching. The standard deviation bands are one of the features of our VWAP Intraday indicator. Both Intraday and Aspect are available on our site as either part of a standalone package or included with our full on-demand course. You can find all of the course details - including a section on the custom indicators - here: thevwap.com/vwap-on-demand. Thanks!
Great, thank you.
the vwap goat back at it again! love it dude 👌
Ill have to give a second look, i love to bottom fish and am using williams % and adaptive RSI etc thanks for sharing this :)
Excellent. I think I’ll be signing up for the group coaching
Zach, assuming a beginner wants to trade using only the VWAP test or bounce strategy and only looks for longs above VWAP and shorts below VWAP, how should he scan for stocks that are suitable for this kind of set up ? Or is it better to just create a watchlist of several mid / large cap stocks and wait for a set up ? In your experience, do individual stocks “respect” the VWAP more compared to stock index futures like the ES ?
Hey, the most basic way to find those types of trades is essentially what you described. You can create a more refined watchlist and cycle through it over the course of the day to monitor what names are trading above or below VWAP and how far away from it they currently are. But in terms of maximizing efficiency, we're actually nearing the release of our intraday scanner that will identify and alert potential trade candidates right in line with what you're describing, as well as other setups that we teach. There's more info at thevwap.com/scans/.
And it's tough to say if individual stocks respect it MORE than the indexes, as we've seen plenty of evidence of VWAP being successfully applied to futures markets like /ES, /CL, etc. We tend to focus more on individual equities given the larger quantity of them, so while it's tough to say if VWAP respects those individual names more I can say that they typically produce more opportunities overall on any given day.
TheVWAP Great, thanks for the reply, look forward to the scanner :)
@@thevwap is the scanner live on the site? When i click the link you posted it states “ under redevelopment”. Thanks
@@stewybagodonuts817 As of right now the scans aren't available, but we're actively working to bring them back in some capacity. If you email us at support@thevwap.com so we have your address of file I can keep you updated when there's more info available.
Really helpful insights. Thank you very much. Around 9:20, re: what it takes to overcome VWAP inertia...wouldn’t it take lots of money and volume (not necessarily time) ?
Yeah absolutely, that's the main point we were looking to make. The longer a VWAP goes, the less responsive it becomes given the amount of volume the underlying stock has inherently traded over that period of time. So as a result, it would then take an atypical price move with significant volume in order to redirect that VWAP in a meaningful way. It helps us determine which price moves are legitimate and sustainable versus which ones will likely revert back towards the average.
Can the VWAP be used to trade penny stocks or more volatile stocks?
Hey Austin, we've seen instances of it being effective on both but we consider it to be much more reliable on stocks that trade with sufficient liquidity (a few millions shares) on a day-to-day basis. However, consistent volume and above-average volatility aren't necessarily mutually exclusive.
It has a role to play on some of the stocks you're referring to, but we don't spend much time focusing on penny stocks or lower-float "momentum" stocks so we don't feel comfortable advocating for the use of VWAP and deviation bands on those tickers without having enough visual evidence to strongly support the claim.
Thanks!
everything he said here could be said in 4 minutes.
as usually with every tutorial or anything that promotes a paid membership to something
In your opinion Zach...how effective is VWAP with forex tick volume?
Hey Mike, in all honestly we haven't spent much time digging into the effectiveness of VWAP on Forex using tick volume as a stand-in for transaction volume. We've always tried to make traders aware of the limitations of VWAP in the Forex markets due to the lack of centralized volume that removes the "volume-weighted" component of the indicator, but it would be interesting to know if tick volume can act as a viable workaround.
We don't have many traders focusing exclusively on Forex who reach out to us, but if you do try to experiment with that alternative and have some success then we'd be fascinated to know about it. Thanks!
@@thevwap Thank you for that response...much appreciated. There have been studies that have shown that Tick volume can be a pretty accurate proxy for real volume.
VWAP, StDevs and Session Volume Profile have helped me immensely in making sense of price movements and reveals the "move of the day" with such clarity. Fantastic tools!