VWAP: Live Trade Examples & Setups

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Video Transcript:

Hello everyone, it’s Dale here. Last week, I had a webinar on VWAP trading, and today I’d like to show you a couple of examples of how the setups I demonstrated in the webinar work in current markets. If you haven’t seen the webinar, I recommend starting with that. Otherwise, you may have difficulty understanding what I’m going to show you in this video. So, if you haven’t seen the webinar, go to my website, Trader-Dale.com, and visit the videos section to find and watch the webinar. You can learn the setups I’ll be discussing today there.

Alright, let’s check out the charts. The first chart is the EUR/USD, 30-minute timeframe, my favorite timeframe. If you look at the chart, the most prominent swing point is this one, right? As I showed you in the webinar, if you anchor the VWAP to the candle that created the high of that swing point, the bullish candle here, it will show you the position of the average trader since this important swing point. The blue line is the anchored VWAP. By the way, you can move it around the chart like this; it’s very easy to use. Currently, I’ve anchored it at the top of this swing point. As I demonstrated in the webinar, I like to trade combos of multiple trading setups, not just pullbacks to VWAP but multiple setups. Here, there was a nice trading combo for a short position from this place. The price made a pullback to the anchored VWAP (the blue line) and also to the gray line, the first deviation of the weekly VWAP. This is a combo of two VWAP setups. As you can see, these two lines met at this place, creating a nice combo indicating a short position. This is the sort of combo I discussed in the webinar. When you see this, there’s a very good chance the market will react as it did here a couple of days ago on the Euro.

Another strong swing point was this one. If you anchor the VWAP there, you can see the price reacting to it. This reaction, this reaction, this reaction—this one missed the VWAP by a couple of pips but still, the VWAP line serves as strong support.

Now let’s go to the next example, the AUD/USD. Here, we also have a very strong swing high. Let’s anchor the VWAP there and look at this place where the price makes a pullback to the anchored VWAP. Like the Euro example, we have the first deviation of the weekly VWAP (the gray line) meeting with the anchored VWAP. This is a combo you want to trade because two independent VWAP setups point to this level, indicating a short position. The price overshot the level by around 8 pips, but the reaction was still very nice.

Another reaction to the anchored VWAP occurred here, creating another nice combo. If you look at this downtrend zone, there is a heavy volume zone exactly where the price hit the VWAP. I mean the beginning of that heavy volume zone. I like to trade from the beginning of heavy volume zones. It’s not the heaviest volume zone within the downtrend, but it’s a strong one, and it meets with the VWAP, adding strength. Another factor adding strength to this level is this yellow dotted line, the VWAP from the previous week. It ended on Friday, and a new VWAP started from Monday, but this yellow dotted line shows where the previous week’s VWAP ended. It also points to this level, creating a nice trading combo. What happened next is the price went past the VWAP, but there wasn’t any strong confluence or combo anymore, so it was not a good place to take a short.

Next, let’s look at the USD/JPY. Here, I’ll also anchor the VWAP to this strong rejection of low prices. In this immediate area, this is the most prominent place, right? Every trader knows about this swing point. If you anchor the VWAP to the candle that created the low, you can see the price reacting beautifully to it.

Alright, now one last example on the 30-minute chart, the AUD/NZD. Here, we have another setup I showed you. There was a rotation followed by a strong trend. If you examine that rotation with volume profile, it confirms heavy volumes were traded within it. The weekly volume profile also shows this, but the flexible profile can select only the rotation of interest. We have a rotation where heavy volume was accumulated, followed by a trend. We anchor the VWAP to this candle marking the end of the rotation and the start of the trend. The price makes a nice pullback to it and then a nice reaction. Again, we have a combo of two VWAP setups: the anchored VWAP (the blue line) and the first deviation of the weekly VWAP (the gray line). When the price is moving above it, like here, you want to trade pullbacks to the first deviation. This is called the trend setup, which you can learn about in the VWAP course I just published on my website. The VWAP trend setup aligns nicely with the anchored VWAP, creating a two-setup combo indicating a long position.

Now, for those who prefer swing trading or long-term position trading, let me show you two examples on a daily chart. This is the AUD/USD daily chart. There was a strong swing low here, with heavy volumes traded within that swing low. Anchoring the VWAP there, you can see two pullbacks to that anchored VWAP, both with nice confluences. The first pullback has a confluence with the yearly first deviation (the gray line). The second pullback has a confluence with the yearly VWAP (the yellow line). Both pullbacks show reactions to the anchored VWAP and the yearly VWAP.

Finally, let’s look at the USD/CAD daily chart. The standout swing point is this one. Anchoring the VWAP to the candle that formed the low, you can see it represents strong support with multiple price reactions. Buyers are currently in control on the USD/CAD, as indicated by the price moving above the anchored VWAP.

Those were the examples in the current markets. If you find this interesting and want to learn more about VWAP trading, head over to my website, Trader-Dale.com. Click on “Trading Course and Tools” to find the VWAP pack I released along with the webinar. I’m running a launch sale on the VWAP pack until this Friday, so for two more days, you can get it at a significantly discounted price. If you’re interested in getting all three packs (Volume Profile Pack, Order Flow Pack, and VWAP Pack) in one discounted bundle, scroll down the page to find them for $797.

Thanks for watching the video. I hope you found it useful, and I look forward to seeing you next time in the next video or in our members area. Until then, happy trading!

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