---
title: "Definition of VWAP"
url: https://signalscreener.fr/definition/vwap/
markdown_url: https://signalscreener.fr/definition/vwap.md
description: "The average price weighted by volume, showing the true average price paid by all traders throughout the day."
type: glossary-definition
site: Signal Screener
language: en
keywords:
  - "VWAP"
  - "Volume Weighted Average Price"
translations:
  de: https://signalscreener.fr/de/definition/vwap.md
  es: https://signalscreener.fr/es/definition/vwap.md
  fr: https://signalscreener.fr/fr/definition/vwap.md
  it: https://signalscreener.fr/it/definition/vwap.md
  pt: https://signalscreener.fr/pt/definition/vwap.md
---

# Volume Weighted Average Price

## What is VWAP?

The average price weighted by volume, showing the true average price paid by all traders throughout the day.

## Think of it like this

Like calculating your average grocery cost by how much you bought at each price, not just the prices you saw.

## Formula

```
VWAP = Cumulative (Price × Volume) ÷ Cumulative Volume
```

- **Typical Price**: (High + Low + Close) ÷ 3 for each period
- **Volume Weight**: More volume = more weight in average

## Why it matters

- Institutional traders benchmark against VWAP
- Shows if you got a good execution price
- Acts as dynamic support/resistance
- Resets each trading day

## What's a good value?

| Range | Rating | What it means |
|---|---|---|
| Price > VWAP | Bullish | Buyers paying above average |
| Price < VWAP | Bearish | Sellers accepting below average |
| Price at VWAP | Fair Value | Price at average transaction level |
| Cross VWAP | Trend Shift | Intraday trend may be changing |

## Real-world example

Day traders often buy below VWAP and sell above VWAP to trade mean reversion.

---

This is educational content, not financial advice.

Source: [Definition of VWAP](https://signalscreener.fr/definition/vwap/) on Signal Screener. Free to quote and cite with attribution and a link to that URL, which is the canonical one.

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