Thread by @_AsthaTrade

Unravel the secret to success in Intraday trading.

The MOST EFFECTIVE tool for Day Trading.

VWAP. A 🧵

#niftyOptions #investing #banknifty

1.
Simply put, VWAP calculates the average price of a security by factoring in both price and volume.

2.
VWAP acts as dynamic Support and Resistance

VWAP above the price acts as resistance and below the price acts as support.

3.
Closing below VWAP can be taken as stop-loss if bought above VWAP for intraday.

For reversal trades, VWAP can be taken as target

Vice versa for sell trades.

4.
If price continuously stays above Vwap for two days, it signals buying pressure.

It means institutions and traders believe stock is undervalued and might be accumulating.

5.
VWAP Crosses: When the price crosses the VWAP, it can be an indication of a trend shift

6.
Psychological Level:

Many traders perceive assets as overbought/oversold basis VWAP

This can lead to buying or selling actions that push the price back toward the VWAP.

7.
Institutional Trading Benchmark:

Institutions break Large trades into smaller chunks to avoid market disruption.

Targeting VWAP gives better price discovery and minimizes slippage.

Cont...

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