Proven Strategies That Keep You Ahead of the Market
MVWAP Bands with Pivots
Know when an investment is favorable with a time tested benchmark of price
MVWAP is the acronym for the Moving Volume Weighted Average Price, widely used by traders throughout the years as a benchmark of price. Strengthen your trading and realize the most optimal plan of attack, knowing when an investment is favorable or unfavorable. Use MVWAP as a means to determine the markets average trading price during a given period by taking into account both the price and the volume or number of shares being traded during the same period.
- Confirm your trade is inline with price and volume
- Use MVWAP with tick, intraday or long term charts
- Confirm hidden support and resistance, when used in combination with standard deviation.
- Use MVWAP as a measure of efficiency of your trades.
- Discover points of liquidity.
With 5 templates, 1 chart page and 50 different indicators; the MVWAP with Pivots Library is overflowing with valuable tools for the stock, ETF or futures trader.
Apply a standard deviation of the MVWAP to the charts to see how far away from the average price the market has moved. Each standard deviation is plotted from the MVWAP, therefore, the chart will have three lines above and three lines below the average price, one for every standard deviation. The deeper the market goes into the standard deviations the more extremely the market is under or overvalued.
MVWAP is most frequently used during intraday time periods, allowing you to see the volume and average price during shorter time periods. One drawback to an intraday review is a lag in the indicator, because with a larger time period you see a larger lag time. Many suggest using tick bars for looking at the MVWAP in the calculation. This gives a clearer picture to the overall volume and helps shorten the lag with the indicator.
Standard deviations can often act as a hidden support or resistance. Much like John Bollinger's idea of selling at the top Bollinger band and buying at the lower Bollinger band in range bound markets, the same can be used with the MVWAP with standard deviations.