I will break this section into to three underlying parts. The first part, I will go over the basics of the tool. The second part, I will go over how I use various VWAP periods to filter through the markets to understand what is occurring from a bigger picture perspective. I won’t discuss how I trade with the VWAP tool just yet and will reserve that piece for the upcoming “Trading Methodology” section. And the third part, I will discuss the MIDAS VWAP concept.
Section One: The Basics of VWAP
The VWAP is potentially one of the most important tools that can be used in market analysis as well as trading. It gives you a clear sense of what the market’s current state is based on the periodicity in which