VWAP Indicator Explained — Step-by-Step Guide & Transcript

[00:03] time to open your manual. I am Lis and I am Ricardo. In this video we're going to and I am Ricardo. In this video we're going to talk about the VAP indicator, which stands for talk about the VAP indicator, which stands for

[00:17] by professional traders, usually for intraday trading. In today's video, we're going to talk about what ViewP is, give tips and strategies, and show you how to best use this indicator in your daily trading. It's great for day trading.

[00:34] Stay until the end, because you'll definitely leave here with a lot of information. That's it . So go ahead and follow our channel, help us reach start making money from this too, right? That's already a great help for us.

[00:51] Like our video, comment, share, help us get more engagement on social media. Perfect. Thank you very much, and let's learn.

[01:07] moving average that takes into account not only prices, but also the trading volume at each price. It shows the volume-weighted average price over a period, typically used in a single day's trading. While

[01:22] traditional moving averages give equal weight to each price, VAP gives more weight to prices with higher volume, offering a more accurate view of the actual value traded. More experienced traders will use VAP to identify the

[01:37] will use VAP to identify the day's trend and dynamic support and resistance points. But how do you interpret the VOP? When the price is above the VOP (Value of Production), it means that buying pressure is prevailing,

[01:51] suggesting an upward trend. When the VAP price is below, it indicates prevailing, suggesting a downward trend . VAP also serves as a benchmark for assessing whether the price is cheap or expensive relative to the volume

[02:07] traded during that period. This indicator is widely used by professional traders for entry and exit references, and even for allocating capital, avoiding trading against market trends. So now in the

[02:22] chart, I'll show you how to insert the VAP and how to view its function as support, resistance, and trend follower, right? So here in Profit, we're going to right-click here, select

[02:37] Indicators, look for the Indicator View, and it will appear will appear on the chart. OK? I'll make it just a little bit thicker, just so it's easier to see, okay? Here I'm using the no-

[02:51] mins timeframe, which is 5 minutes, but it's up to you, what timeframe would you like to trade with? Remember that intraday trading would be ideal, OK? N, to do day trading, because it always resets, it resets the next day, okay

[03:05] ? So here you can see exactly how it serves as a resistance signal, a resistances where we look for peaks, some

[03:22] put lines to look for those regions where the price might resist and end up not breaking through, right? So it also serves as a dynamic resistance. And that's exactly what happened here. The

[03:36] exactly what happened here. The price tried to break through, but it wouldn't let go, and the price actually went down; the price of that asset fell quite a bit . And here I'll also take the opportunity to show the issue of following the

[03:49] trend. If the asset's value is below the view, it indicates a is below the view, it indicates a downward trend. OK? If it's above, it means an upward trend. It won't work every day; it's not

[04:03] serve as, for example, support in this case, or resistance that has worked at least once or twice, right? Yeah, it always breaks, right? Not everything is certain in day trading, right? On many days you'll

[04:18] use it more as a trend follower than to always follow the trend. You resistance. The same thing happened here on that day too. He tried to break through this dynamic resistance of VAP, and he couldn't. It

[04:33] broke through a little bit, let's see here, 120 points, and the price literally plummeted here, right? And on this day, you can see two things that show it's interesting for you to understand how this indicator works.

[04:45] See this? He finished the previous day up here and when he's already down here, he starts again. Why? Because it resets overnight . In this case, doing all the calculations, according to the View formula, the

[04:59] VIP value ended up in this position here. But since it resets, it starts the calculation for this first candle here. So you can't use it, right,

[05:11] So you can't use it, right, as a swing trade, or for longer periods. And this also indicates how much support they used here, that it didn't break through, right? It broke through just a little, only one candle here that

[05:26] remained practically intact, which gave 80 points, and it kept hitting, hitting, hitting, testing the limits of resistance and support,

[05:38] and when it couldn't hold on any longer, it really peaked upwards . Now let's talk about some very important tips regarding VAP. First, it is much more effective on assets with good volume, such as popular stocks or mini-

[05:52] index and mini-dollar futures. In sideways markets, Vap may generate false signals or no signals at all. Therefore, combine it with trend analysis and other indicators. Remember that VAUAP resets daily,

[06:06] so it is not suitable for medium to long-term analysis. It is mostly used for scalping or day trading. Always use proper risk management, setting stop-loss orders and profit targets, even when market trends suggest a good opportunity. Respect their

[06:22] strategy, respect their plan. Vap is a powerful indicator for identifying trends, support, and dynamic resistance. Combined with other tools and good risk management, it can be a great ally in your

[06:35] strategies. Yes, and that's it. If you've made it this far to the end of this video, don't forget to check out our playlist with other indicators, and also give it a like and subscribe to our channel,

[06:51] 1000 subscribers. Comment here with any indicator you saw in the playlist that we don't have so we can discuss it and help you on your journey, really create this trader's manual to help you advance in

[07:07] your life, advance in technical analysis, okay? Until next time.