Anchored VWAP is the same volume-weighted average, but instead of resetting each session it starts from a point you choose. You anchor it to a meaningful event and it then measures the average price everyone has paid since that moment.
The power is in the anchor. Because it is tied to a specific event, an anchored VWAP tells you whether participants who acted since that event are, on average, in profit or in loss — which shapes how they may behave when price returns to the line.
Where to anchor
- A significant swing high or swing low.
- A major news release or earnings event.
- The start of a clear breakout or trend.
- The session or week's open for a cleaner reference.
Anchored from a swing low, the line often acts as dynamic support while an uptrend holds, because buyers since the low are collectively in profit and inclined to defend it. Anchored from a high, it can act as resistance in the same way for trapped buyers.
Use it as a reference, not a rule. A well-chosen anchor gives a meaningful line; a random one gives noise. As with any tool, wait for price to react at the line and confirm before acting, and place stops beyond it.
Anchored VWAP measures the average price paid since an event you choose — a powerful reference only when the anchor itself is meaningful.