Volume-Weighted Average Price

What is Volume-Weighted Average Price?

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VWAP is the average price of an asset weighted by volume — it tells you the true fair value of what traders actually paid, not just any arbitrary average. Professional traders and institutions use VWAP as a benchmark to judge whether they're buying or selling at a good price. Price above VWAP means buyers are in control and the asset is trading above fair value. Price below VWAP means sellers dominate and the asset is trading cheap. BitThor calculates VWAP on a rolling window using GPU acceleration for speed.

How Does It Work?

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The bot computes rolling VWAP using high, low, close and volume data. When price is below VWAP, the asset is trading below fair value — the bot signals Buy. When price is above VWAP, the asset is trading above fair value — the bot signals Sell. BitThor also computes VWAP bands (similar to Bollinger Bands upper and lower bounds) to identify when price has stretched too far from fair value.

Using It in BitThor

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Add VWAP from bot config. It works brilliantly as either a primary indicator or a confirmation tool. Particularly effective in active, high-volume markets. Pairs well with RSI or MACD for a price-action plus fair-value strategy.

Tips for Beginners

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• VWAP is a natural mean-reversion target — price tends to drift back toward it after big moves away from fair value.

• Use the VWAP bands like Bollinger Bands: when price stretches significantly above or below the bands, a snap back toward the average is likely.

• After a big price move, watch for price to return to VWAP — that's often where the next decision point plays out, and it's a high-confidence trade setup.

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Indicator by: BitThor | Learn more