VWAP Cross

DEFINITION of 'VWAP Cross'

A trading indicator that occurs when the current price crosses over the volume-weighted average price (VWAP). Since the VWAP provides a measure of the average price within a time period, traders often look to buy a security at a VWAP cross price lower than the VWAP. Conversely, when the current price crosses above the VWAP, it may be an indicator to sell.

BREAKING DOWN 'VWAP Cross'

The VWAP cross indicator falls under the category of technical analysis techniques that are sometimes used in securities trading. It is particularly popular within the foreign exchange markets, although it can be applied to any traded security. The idea is that the VWAP provides a loose indicator of an equilibrium price in the market, and thus gives a good idea of when to buy or sell in the short term.

RELATED TERMS
  1. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth ...
  2. Chartist

    An individual who uses charts or graphs of a security's historical ...
  3. Bollinger Band®

    A band plotted two standard deviations away from a simple moving ...
  4. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  5. Head And Shoulders Pattern

    A technical analysis term used to describe a chart formation ...
  6. Sortino Ratio

    A modification of the Sharpe ratio that differentiates harmful ...
Related Articles
  1. Forex Education

    Top 7 Questions About Currency Trading Answered

    Whether you're puzzled by pips or curious about carry trades, your queries are answered here.
  2. Forex Education

    Trading With VWAP And MVWAP

    Volume weighted average price (VWAP) and moving volume weighted average price (MVWAP) are trading tools that can be used by all traders to make sure they are getting the best price.
  3. Forex Education

    Using Double Tops And Double Bottoms In Currency Trading

    Find out how to apply the two most common price reversal patterns to your trading.
  4. Forex Education

    Using Elliott Wave To Trade Forex Markets

    Learn how to set up a trading plan using this method, to profit as a forex trader.
  5. Options & Futures

    Trading The QQQQ With In-The-Money Put Spreads

    Even beginners may use this strategy to trade a bullish outlook.
  6. Trading Strategies

    Find Turning Points With Single-Day Patterns

    On their own, single-day patterns can be unreliable, but that doesn't mean they can't be used effectively.
  7. Charts & Patterns

    How To Use Volume To Improve Your Trading

    The basic guidelines to analyzing volume may not apply in all situations, but overall, they can help direct entry and exit decisions.
  8. Mutual Funds & ETFs

    The ABCs of Mutual Fund Classes

    There are three main mutual fund classes, and each charges fees in a different way.
  9. Investing Basics

    5 Common Mistakes Young Investors Make

    Missteps are common whenever you’re learning something new. But in investing, missteps can have serious financial consequences.
  10. Mutual Funds & ETFs

    The 4 Best American Funds for Growth Investors in 2016

    Discover four excellent growth funds from American Funds, one of the country's premier mutual fund families with a history of consistent returns.
RELATED FAQS
  1. What is a common strategy traders implement when using the Ultimate Oscillator?

    The ultimate oscillator is an indicator that traders use to measure momentum across three time frames. Using three time frames ... Read Full Answer >>
  2. What is a common strategy traders implement when using the Triple Exponential Average ...

    A trader can use the triple exponential average (TRIX) to identify direction of momentum and potential reversals of trends. ... Read Full Answer >>
  3. How do I use the Vortex Indicator (VI) to create a forex trading strategy?

    The vortex indicator is composed of two oscillators: a downtrend oscillator (VI-) and an uptrend oscillator (VI+). It is ... Read Full Answer >>
  4. What is a common strategy traders implement when using the Volume Weighted Average ...

    Using the volume-weighted average price (VWAP) when trading in short-term time frames is highly effective and simple. One ... Read Full Answer >>
  5. Why is the Volume Weighted Average Price (VWAP) important for traders and analysts?

    Volume-weighted average price (VWAP) is an important tool that traders use to gauge whether a stock was bought or sold at ... Read Full Answer >>
  6. What is a common strategy traders implement when using the Uptick Volume?

    Uptick volume is used to identify trends and momentum of a stock to the upside. It shows how much demand there is for a stock ... Read Full Answer >>
  7. What is a common strategy traders implement when using the Volume Price Trend Indicator ...

    A trader can use the volume price trend (VPT) indicator to identify buying and selling pressure and momentum of a stock. ... Read Full Answer >>
Hot Definitions
  1. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
  2. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  3. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  4. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
  5. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. Included in earnings reports are items such as net ...
Trading Center