I’ve been incredibly lucky to learn first-hand from some of the top traders and technicians.
I’ve gained a deep understanding of VWAP and how to anchor it from my mentor and friend, Brian Shannon.
He created the anchored volume weighted average price as an indicator and is the VWAP master as far as I’m concerned.
It’s my single favorite tool. I’m using it all day every day.
In order to use VWAP to gain an edge in the market, you have to know where to anchor it. It’s the most important part.
I always have mine anchored to January 1st.
I also anchor them at key highs and lows. For example, most of my charts have VWAPs from the 2022 bear market lows as well as the 2021 bull market highs.
I anchor them from big earnings reactions and news events. These are always good.
For example, a stock has its best day in years on the heels of earnings. Anchor there.
A stock sees daily volume that is exponentially higher than its average activity. Anchor there.
Basically, any candle that shows extreme momentum or volume is a great place to drop a VWAP.
A lot of my charts also have VWAPs from August 5th as this marked a massive volatility event as well as a tradable low for so many stocks.
But lately, the most helpful VWAPs have been those set from the Election Day rally.
Here’s a look at Bitcoin with the VWAP anchored from November 6th. Notice how the election candle was also the breakout candle of an 8-month range. This makes it an even better date to anchor from.
It comes in around the low 90s which has been a critical zone of late. It is also the breakdown level of a potential short-term top.
Last week, it was tested for the first time and broke momentarily before the bulls stepped in and sent prices higher. BTC has rallied more than $10k in the time since.
Today, it blasted back above its VWAP from the ATH made a few weeks ago. I look at this action as confirmation that bulls are back in control of the tactical trend.
And while we’re at it, let’s check in on Solana. We’ve anchored VWAPs from the election candle and recent ATH here as well.
Solana broke below its election VWAP during December’s corrective action. It also fell back into its old range for a few weeks.
However, since last week SOL has been on a tear, breaking back above its Q1 highs and challenging this crucial VWAP resistance.
It’s battling with this level now. I think this blue-chip crypto leader will follow the path of BTC and reclaim it soon.
This would mean buyers are back in control of both of these cryptocurrencies over long and short timeframes.
If that’s the case, we’re probably experiencing a fresh leg higher that takes SOL, BTC and others to and through new record highs.
Put these key VWAP levels on your charts now and use them to guide you through these trades.
