Traders Laboratory - View Single Post - Trading with Market Statistics III. Basics of VWAP Trading
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Old 07-12-2007, 11:12 PM
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Re: Trading with Market Statistics III. Basics of VWAP Trading

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What would you consider doing when VWAP is below PVP and price action is above PVP and thus above VWAP as well? On the chart I am looking at now VWAP is slightly below PVP but price action is quite above PVP, is this still considered a short entry?
Unleashed---good question. If you looked at the first video in this thread, you saw exactly that situation. If you are a newbie, you stand aside. Do nothing. In that video, NEWBIE took a long trade based on perceived market trend and was stopped out. Trading in the low volume region is dangerous and requires more advanced analysis. We'll get to that in future threads.
In your chart, from what you describe, it sounds like VWAP ~= PVP. Again do nothing.

It's imperative that you understand the logic of the basic VWAP trade. It forms the foundation of everything that is to follow.

JERRY

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