Sunday, June 11, 2017

VWAP And Standard Deviation Bands Amibroker AFL

 VWAP & Standard Deviation Bands

In finance, volume-weighted average price (VWAP) is the ratio of the value traded to total volume traded over a particular time horizon (usually one day). It is a measure of the average price at which a stock is traded over the trading horizon. 

The VWAP can be used similar to moving averages, where prices above the VWAP reflect a bullish sentiment and prices below the VWAP reflect a bearish sentiment. Traders may initiate short positions as a stock price moves below VWAP for a given time period or initiate long position as the price moves above VWAP

Institutional buyers and algorithms will often use VWAP to plan entries and initiate larger positions without disturbing the stock price.

In addition to the VWAP , this Amibroker AFL also includes Standard Deviation Bands from the VWAP. So basically one can assume the chances of movement away from the VWAP. This is very important from the Intraday trading point of view. 

VWAP And Standard Deviation AFL
VWAP And Standard Deviation AFL


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