Act as overbought zones where price is stretched too far above the institutional average cost basis. Take partial profits here.
, macro highs/lows, and high-volume gaps.
The , popularized by analyst Brian Shannon, is a powerful indicator that combines price, volume, and time from a specific, user-selected point rather than just the market open. Unlike standard VWAP, which resets daily, AVWAP allows you to measure market sentiment and "fair value" since a significant catalyst. Core Concepts of Anchored VWAP
: Calculate your position size based on how close the asset is to the anchor line. Buying closer to the AVWAP allows for tighter stops and larger position sizes. Buying far extended above the AVWAP requires smaller sizing due to the wider distance to your invalidation point.
Combine AVWAP with other technical indicators for higher conviction trades. maximum trading gains with anchored vwap pdf
The Anchored VWAP uses the exact same mathematical formula, but instead of automatically resetting at the start of a new day, it begins its calculation at a user-defined candlestick. The calculation then runs continuously forward from that specific point across days, weeks, or months.
As articulated by Chartered Market Technician Brian Shannon in his definitive guide, Maximum Trading Gains with Anchored VWAP: The Perfect Combination of Price, Time & Volume , this advanced technique moves beyond the rigid reset of the daily VWAP. Instead, it allows traders to "anchor" the calculation to any significant point on a chart—a major swing high or low, an earnings announcement, a breakout, or a gap.
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This public link is valid for 7 days and shares a thread, including any personal information you added. This link or copies made by others cannot be deleted. If you share with third parties, their policies apply. Can’t copy the link right now. Try again later. Act as overbought zones where price is stretched
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to the AVWAP line to find low-risk entry points.
Markets often move in three distinct pushes before a reversal. Traders can use AVWAP to gauge the maturity of a trend.
Anchor to structural swing points to determine if a reversal is likely or if the trend is continuing [5.3]. 3. Confluence Strategy The , popularized by analyst Brian Shannon, is
Maximum gains come not from high win rate but from trades.
: Earnings reports, Federal Reserve (FOMC) announcements, or major news headlines.
Look for price pullbacks that touch the AVWAP line but do not close below it [5.2].