FREE EXPLAINER · BEGINNER FOUNDATION
What Is VWAP?
VWAP is the volume-weighted average price, usually calculated during a trading session.
The simple explanation
VWAP is the volume-weighted average price, usually calculated during a trading session.
Why it matters
It shows the average price paid, weighted by where volume traded.
A simple way to think about it
VWAP resets each session unless anchored. It is widely watched, so reactions can matter, but context and order flow still decide the outcome.
A common beginner mistake
Assuming price must always return to VWAP.
What to check next
- Check that you understand the definition in plain English.
- Look at the company, market and timeframe rather than one number alone.
- Ask what could change the interpretation.
- Keep risk separate from excitement or certainty.
One calm takeaway
VWAP is the volume-weighted average price, usually calculated during a trading session. Use it as one piece of context, never as a promise about what happens next.