Anchored VWAP: The Only Trading Tool You Need

just take a moment to look at this chart look at how many times the price respected this blue line when the price trades above it the price finds support three times and finally when the price broke below it the price found resistance twice now I know what you're thinking it must be a moving average with some complex calculations but I promise you it's not in fact it isn't even an indicator just like the Fibonacci retracement this is a drawing tool the name of this tool is anchored v-wop it is one of the best tools out there it has a track record of being better than any moving average and the regular v-wop we will show you how to use the anchored v-wop with three Advanced strategies you have never seen before if that sounds interesting subscribe to our Channel and click the Bell icon to get notified whenever we release new videos you can also check us out on Instagram by clicking the first link in the description below with that being said let's get into today's video topic one what is anchored v-wop we are all familiar with the v-wop indicator it is among the most powerful indicators especially for day Traders those who may not know v-wop stands for volume weighted average price you can think of it as a moving average that uses volume as an additional input to calculate the day's average price v-wop shows us the perceived value of the asset for that day but the v-wop has one problem it starts its calculations from the opening of the day so at any given moment the v-wop value is only based on the current day price action but what if we want to look at a broader context what if we want to use a higher time frame to trade the regular v-wop has no value for a swing Trader that is where anchored v-wop comes in the anchored v-wop uses the same calculations as the regular v-wop but it allows you to select the exact candle where you want the calculations to begin it can give you a better understanding of the value of multi-day trends it can also help you identify areas where breakouts may occur let's understand how to plot it on your charts topic 2 how to apply it on your charts to plot the tool in the chart head over to tradingview a free charting website you can use the link in the description below to sign up and get a one month free trial on their premium plans once you're on your charts hover over to the left where you will see the drawing tools then select the arrow beside the second option to open a drop down menu now go all the way down that list and select the anchored v-wop you can also click on the star to add it to your favorites once selected you can click on any candle and the tool will plot itself starting from that price but plotting the tool from random candles is useless so let's understand how to use it topic 3 how to use the anchored v-wop ideally we want to plot the tool from major reversal points or we can also apply them to the starting points of a trend move for instance here we see that the price was in a tight consolidation before it started this massive uptrend the uptrend actually began from this candle so we plot the anchored v-wop from this point as you can see it provided support to the price two times the price touched the v-wop and moved upwards and that brings us to the first use of anchored v-wop topic 4 use 1 catching pullbacks the anchored v-wop is one of the finest tools or indicators that you could use to catch pullbacks plotting it from a starting point of the trend gives you the assets fair value within the trend in an uptrend when the price goes below the v-wop this means that the asset is trading at a lower price than its fair value the big players see this opportunity and their buying orders take the prices above the v-wop that's why the anchored v-wop works really well here's another example this time in a downtrend from this point the price reversed and started a downtrend so we plot an anchored v-wop from this candle we can see that the price pulled back to the v-wop and Consolidated for a few candles before moving lower this is because when the price starts to trade above the anchored v-wop sellers are getting a higher price than its fair value so they jump on the opportunity and create selling pressure imagine someone willing to pay you fifteen thousand dollars for your used car when the fair value is twelve thousand dollars would you take such an offer of course you would and that's what the sellers do they jump on the opportunity and create huge sell orders above the v-wop that's why you see these down moves now obviously we don't blindly enter whenever the price pulls back to the anchored v-wop we also look for other confirmations that we will discuss later in the strategies section the important point to note here is that the anchored v-wop will provide support to the price in an uptrend and resistance in a downtrend topic 5 use number two breakouts after a sustained Trend when the price breaks out of an anchored v-wop it is a sign that the trend has lost momentum and a reversal may be in the cards here we saw an uptrend start from this candle so we plot the anchored v-wop from this candle the price found support at the v-wop twice before breaking below it once the price broke below the v-wop we saw a massive down move that followed here we saw a downtrend start from this candle so we plot the anchored v-wop from this candle onwards the price stays below the v-wop for a long time before breaking above this was the first sign that the price may have lost momentum and it may move upwards as you can see a powerful uptrend follows so breakouts of anchored v-wops are also good signs of reversal just like any other strategy these breakouts also don't work all the time sometimes they can be fake therefore it is necessary to add other confirmations to create a winning strategy so now let's move on and discuss three Advanced strategies you can use to trade the anchored v-wop if you're enjoying this video so far be sure to hit that like button and subscribe to our channel so that you don't miss any of our new videos thank you topic 6 anchored v-wop bands the anchored v-wop can also be used as bands to determine a zone of support or resistance instead of a line here initially we witnessed a huge down move then the price stalled and created this high the price then broke above the high to create a higher high at this point this might be the start of an uptrend we select this candle as the starting point of an uptrend and plot an anchored v-wop from here next we identify the first pullback in the trend and plot another anchored v-wop from the end of the first pullback now we have successfully created bands with anchored v-wop on this pullback the price comes near the v-wap bands we expect the price to find support and move upwards we also spot an inside bar which adds to the confluence this now becomes a high quality trade setup and as you can see the price shot up and moved upwards these bands were plotted in September and October last year six months later they are still providing support to the current price at the time of recording this this is the power of creating bands with the anchored v-wop the rules are pretty simple identify the starting point of a trend and the first pullback of that trend plot an anchored v-wop on each of those levels and you end up with these bands that can be held for months if not years here's an example of a downtrend at first we saw this massive up move then the price reversed creating this lower low we take this as a sign of a price reversal and plot an anchored v-wop from this top we then identify this as the first pullback and plot another anchored v-wop from this point now we have successfully created the v-wop Bands as you can see the price rejected the band multiple times giving you three profitable trading opportunities in fact if we zoom out a little bit you can see an unbelievable site these bands were created in May and July of 2021 and yet we saw two trade opportunities in December 2022 and January 2023 these bands have not been broken for almost two years now you can check it for yourself for your reference this is a two-day Char of GBP USD so one candle represents two days of price action I hope you understood the strategy but we are not done yet we still have two more strategies to cover so let's move on to the next strategy topic 7 anchored v-wop plus Fibonacci retracement Fibonacci retracement levels are yet another tool that can help us in spotting areas where the price might find pullbacks if we combine Fibonacci with anchored v-wop that will give us some high quality trade setups the best part about this strategy is that you don't need to find a reversal to plot the anchored v-wop we can utilize this strategy in strong trending markets to catch pullbacks here is an example we see an already established downtrend price makes this swing low and makes a pullback then the price breaks the previous swing low on this candle to create a new low so we identify this high and plot an anchored v-wop we also draw a Fibonacci retracement tool from the latest High to the new low the price pulls back and stalls at the anchored v-wop if we look closely we can also see that the anchored v-wop converges with the 50 level on the Fibonacci retracement tool so this is a strong Confluence between the anchored v-wop and Fibonacci on top of that this inside bar also adds to the probabilities all in all this is a high probability sell trade as a result the price tanked after the inside bar our stop loss should be above the v-wop or 50 percent on such a trade we can Target the recent lows here is a buy setup using the same logic at this point the price broke above the previous swing highs to make a higher high so we spot an uptrend and plot the anchored v-wop from the starting point of the up move then the price makes a pullback and approaches the v-wop so we draw a Fibonacci retracement we notice that the v-wop falls in Confluence with the 0.38 percent level so we expect the price to find strong support at this level as you can see the price found support at the exact price level we also have a Morning Star pattern which also indicates a bullish reversal hence it was a high probability trade as you can see this trade would have resulted in profits now let's discuss the last strategy before we wrap up this video topic 8 anchored view off plus key levels support and resistance levels are one of the foundations of technical analysis they help us identify key areas where we might see a price reversal so it makes sense when the anchored v-wop Falls in Confluence with these key levels it provides us with a high probability trade here is an example this point started a strong down move so we plot an anchored v-wop from here we expect a downside reversal when the price pulls back to the v-wop upon closer examination we also notice that these two reversals from before help us identify a key level now the anchored v-wop and the key level converge at this point so this gives us double confirmation that the price might face some resistance and it may move downwards and that is precisely what happened here is an example of an uptrend here we notice that this was a starting point of an uptrend as the price broke prior highs so we plot an anchored v-wop from this point when the price pulls back to the v-wop line we expect the price to bounce from it we also notice that this reversal helped us identify this key level so now this level should act as a support the anchored v-wop and the support are converging at this point so it was a logical implication to place a Buy trade here and as you can see the price respected the support and moved upwards that brings us to the end of this video in this video we showed you three Advanced trading strategies using the anchored v-wop take this knowledge on your charts and practice using it we hope you have learned something new today if you did hit the like button and press 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Channel: Trade Prime

Views: 325,975

Keywords: vwap, vwap trading strategy, vwap indicator, vwap explained, vwap intraday trading strategy, anchored vwap, Price action trading, trading strategy, day trading, scalping

Id: s2GmnJPa6Ek

Length: 15min 0sec (900 seconds)

Published: Mon Mar 27 2023