Volume Profile shows you the "Point of Control" (POC)—the price where the most volume occurred. If your Anchored VWAP aligns with the POC, you have discovered the most significant support level on the chart. The probability of a bounce approaches 80-90%.
If a stock has been trending downward, you can anchor to the all-time high. If the price rallies and breaks decisively above this declining AVWAP, it signals a shift in market psychology and a potential trend reversal. maximum trading gains with anchored vwap pdf download
Where , summed cumulatively from the anchor candle forward. This simplicity is its genius. By incorporating volume, the line is naturally pulled towards the most active trading prices, giving it a relevance that a simple moving average lacks. Volume Profile shows you the "Point of Control"
While understanding the theory is a great start, mastering AVWAP requires rigorous backtesting, chart study, and practical application. Many traders look for educational materials and guides to accelerate their learning curve. If a stock has been trending downward, you