CrossTrade Logo
PricingHow It Works
Resources
download icon
Download XT
Download the CrossTrade NinjaTrader 8 Add-On
active account management icon
NT Account Manager
Control your NT8 daytrading account
CrossTrade Blog
Stay up to date on news and important updates
Help Docs
Comprehensive help documentation in one spot
CrossTrade VPS
Save 30% on a NinjaTrader VPS through CrossTrade
XT Alert Builder
Our free TradingView strategy for alert building
candlestick chart icon
TradingView Indicators
Download our free TradingView indicators
Trading Journal
Organize your trading business with TraderSync
Prop Funding
Explore popular funding programs that offer NinjaTrader
computer chart icon
TradingView
Learn why TradingView is the worlds most popular charting platform
ninjatrader brokerage world icon
NinjaTrader
Learn why NinjaTrader is the leader in the Futures Industry
contact us icon
Contact Us
Have a question for the team? Ask away!
discord server community icon
Help DocsFree IndicatorsTradingViewNinjaTraderAffiliatesContact Us
Sign UpLog InDashboard
Indicators
VWAP

VWAP Trend Indicator

Download

By downloading this indicator you agree to the terms in our Trading Disclaimer

ES futures chart image

Overview of VWAP

The Volume Weighted Average Price (VWAP) is a pivotal trading indicator widely utilized in financial markets. Developed initially for institutional trading, VWAP has gained immense popularity among individual traders for its straightforward yet effective approach to market analysis.

VWAP emerged from the needs of institutional traders to evaluate their trades against a reliable price benchmark. It first gained significant traction in the late 20th century, thanks to its ability to provide a fair price value over a specified time frame. The exact origins and developer of VWAP are not attributed to a single individual but rather to the evolution of trading practices in institutional settings.

The essence of VWAP lies in its dual focus: combining price and volume to provide a comprehensive market average. This indicator serves several crucial functions:

Benchmarking Tool: It is often used as a benchmark to assess trade execution performance.
‍Trend Identification: VWAP helps in identifying the overall trend by comparing current prices to the average.
‍Support and Resistance Levels: It offers dynamic support and resistance levels, aiding in entry and exit decisions.

In summary, the VWAP indicator is a testament to the synergy of price and volume data, providing traders with a reliable, volume-weighted price average. While its strengths lie in benchmarking and trend identification, prudent traders often pair it with other analytical tools for a more rounded trading strategy. As with any indicator, the key lies in understanding its applications and limitations to effectively harness its potential.

Strengths

Weaknesses

Simplicity: VWAP's straightforward calculation makes it accessible to traders of all levels.
‍
Volume Incorporation: Unlike simple averages, VWAP factors in volume, offering a more weighty insight into price movements.
‍
Versatility: It is applicable in various trading strategies, including day trading and algorithmic trading.

Lagging Indicator: VWAP is inherently a lagging indicator, meaning it reflects past market data and might not always predict future price movements accurately.
‍
Limited Use in Low Volume: Its efficacy is reduced in thinly traded stocks or during off-market hours due to lower volume data.
‍
Over-Reliance Risk: Solely depending on VWAP for trading decisions can be risky, as it does not account for macroeconomic factors or market news.

Solving weakness with VWAP Trend

Our enhanced TradingView version of the standard VWAP, addresses some of the inherent weaknesses of the traditional VWAP through its focus on trend bars and integrated alert system. While the standard VWAP is a lagging indicator that can be less effective in low-volume or sideways markets, this customized version enhances its utility by concentrating on trend bars – bars that close beyond the second standard deviation band.

This focus allows traders to identify significant market movements and strong trends more effectively. Moreover, the addition of alert conditions for these trend bars is a significant improvement. It provides traders with timely notifications about potential high-momentum trading opportunities, enabling quicker and more informed decision-making.

These features make this custom Pine Script indicator a more dynamic and proactive tool, offering traders deeper insights and an active approach to leveraging VWAP in various market conditions.

Check out another indicator...
RSI Momentum
CrossTrade Logo
AriseHealth logoOE logo2020INC logofacebook iconEphicient logoThe Paak logo
Company
BlogPricingCareersAbout UsContact UsAffiliate Program
Resources
DownloadHelp DocsIndicatorsNinjaTraderTradingViewXT Alert Builder
Legal
Privacy PolicyRefund PolicyReferral ProgramTerms of ServiceTrading DisclaimerManage Preferences
CrossTrade facilitates the linkage between alert information sent from a user's chosen trading platform (TradingView) to their selected brokerage or exchange account (NinjaTrader). It is important to note that CrossTrade itself does not generate alerts or offer any trading advice whatsoever. The purpose of the CrossTrade platform is purely to aid traders and investors in implementing their own trading strategies based on their personal alerts. We do not advocate for the purchase or sale of any securities. Additionally, we do not provide any form of trading or investment advice. The platform and its assortment of features, capabilities, and tools are offered on an 'as-is' basis, without any form of warranty. It is crucial to understand that trading any asset carries significant risk and may not be suitable for all individuals. Engage in trading or investing only with capital that you can afford to risk losing.​​

CFTC Rule 4.41 (Hypothetical Disclaimer) U.S. Government Required Disclaimer - Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures, stocks or options on the same. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

Testimonials featured on this website are individual experiences and personal opinions from our users. They are not representative of all reasonably comparable accounts and should not be viewed as guarantees of future performance or success. Any mention of profits or specific returns has been excluded to ensure compliance with regulatory guidelines. Testimonials do not use exaggerated or misleading language and are not indicative of typical results. If a testimonial is paid or incentivized, it will be clearly disclosed.

The following trade names are mentioned on this website to highlight the interoperability of the CrossTrade technology offering with their platforms. CrossTrade is not associated with or endorsed by any of these organizations.​

- TradingView and the TradingView logo are registered trademarks of TradingView, Inc. and/or MultiCharts LLC.
- NinjaTrader, NinjaTrader.com, and other associated NinjaTrader trademarks and names are registered trademarks and property of NinjaTrader Group, LLC., and/or NinjaTrader Clearing, LLC., and/or other NinjaTrader affiliates and entities.
‍
© 2025 CrossTrade LLC. All right reserved.