Based on numerous requests, we’ve added Anchored VWAP as a drawing tool available to everyone.
What is Anchored VWAP?
Anchored VWAP displays the volume-weighted average price for a specific time period, starting from a user-selected point. In other words, Anchored VWAP shows the price of an asset adjusted for its volume starting from any point chosen on the chart. This is a powerful tool because it takes into account the number of shares traded at each price level and presents it as a smooth line.
How to apply AVWAP to your chart
1. Select Anchored VWAP from the drawing tools list on the chart’s left-side panel, as shown below.
2. Click on the chart to select the point from which you’d like to start your calculation. The volume-weighted average price curve will be displayed on the chart as pictured below.
In addition, you can change the color and thickness of the Anchored VWAP by double-clicking on the line and selecting the appropriate parameters in Settings.
A little historical background
The Anchored VWAP tool was developed by the late physicist and technical analyst, Paul Levine, while working on the Market Interpretation/Data Analysis system (MIDAS) between the years 1995 and 1997. Levine developed the methodology of professional trader, Kevin Haggerty, who used volume-weighted average price curves to determine the direction of a position in the 80s. Today, Brian Shannon, Zach Hurwitz, and the CMT Association continue to push the story of Anchored VWAP and have done a fantastic job bringing it into the mainstream.
We’re excited to help the trading and investing community by adding Anchored VWAP to all TradingView charts. If you missed it, we’ve recently improved the original VWAP indicator and now you can choose the interval to calculate. This gives traders the ability to construct any VWAP line based on a time interval of their choosing. You can find more information on these changes in this article on our blog.
Our Help Center also hosts an abundance of useful information regarding indicators and tools, which can be opened directly from your chart. If you’re interested in finding out how the Price Volume Trend indicator works, for example, check out this handy article from our Help Center.
We loved hearing from you regarding new tools and feature requests, so keep them coming. As always, we are happy to build for you and love seeing the effects of our hard work within our community. Thanks for being a part of it all.