Learn · Indicators · 4 min read

What Is VWAP?

VWAP stands for Volume Weighted Average Price — the average price of an instrument over the day, weighted by volume. It's a benchmark institutions use to judge whether they're getting a good fill, which makes it a powerful intraday level for day traders.

How VWAP works

VWAP resets each session and tracks the volume-weighted average as the day unfolds. Price above VWAP is generally “bullish/expensive” for the day; below is “bearish/cheap.” It acts as a dynamic magnet and support/resistance.

How day traders use it

  • Trend filter: trade longs above VWAP, shorts below.
  • Mean reversion: fade extreme moves back toward VWAP.
  • Confluence: a bounce off VWAP that lines up with an order block or liquidity level is stronger.
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FAQ

Is VWAP good for day trading?

Yes — it's one of the most-watched intraday levels, especially on index futures like NQ and ES.

Does VWAP work on futures?

Absolutely. Session VWAP is a staple for futures day traders.

Educational content only, not financial advice. Trading futures carries substantial risk of loss.