What does VWAP mean?

VWAP (Volume-Weighted Average Price) is the average price a stock has traded at during the day, weighted by volume, and resets every session.

VWAP = Volume-Weighted Average Price for the day. Big institutions use it as a benchmark. Price above VWAP means bulls are in control intraday; price below means bears are in control. It resets every trading session.

VWAP example

If 1,000 shares trade at $10 and 3,000 at $11, the VWAP is ($10,000 + $33,000) ÷ 4,000 = $10.75 — closer to $11, because more shares changed hands there.

Common beginner mistake

Using VWAP on a long-term chart. It resets every trading day, so it's a tool for judging intraday prices, not a long-term trend line.