what is a vwap cross
a vwap cross is a trading indicator that occurs when a security s price crosses the volume weighted average price vwap breaking down vwap crossa vwap cross requires a trader to closely follow a security s current price and its volume weighted average price vwap vwap cross chartingtechnical systems can typically be programmed to chart a security s market price and vwap through candlestick patterns and trendlines drawn on a technical chart when a security s price crosses a vwap trendline then a vwap cross signal occurs traders typically consider vwap trendlines similar to resistance and support trendlines in a vwap charting pattern a vwap trendline is a single trendline charted on a candlestick chart this price pattern focuses on the movement of the vwap for a trader using a vwap trendline it is important to understand the vwap s calculation vwap security shares bought security share price security shares bought begin aligned text vwap frac text security shares bought times text security share price text security shares bought end aligned vwap security shares boughtsecurity shares bought security share price vwap is a moving average trendline that allows a trader to visually chart the affects of a security s volume in comparison to its price the vwap calculation is centered around the volume a security is experiencing from day to day other potential volume variables that may be used in conjunction with vwap include the positive volume index and the negative volume index vwap cross signal indicatorsvwap is a trendline that has two influencing factors volume and price thus several scenarios can occur from changes in volume and price generally vwap can be a useful trendline to include on a trader s candlestick chart vwap may be trending above or below a security s candlestick pattern inferences from the variables in vwap are primary drivers of buy and sell signals for traders the immediate affects of drastic volume and price changes that can be seen from following vwap make the vwap trendline a popular trendline for traders to follow if a security s price is trending below its support level a rapid increase in volume and price simultaneously will cause the vwap trendline to spike significantly crossing over the security s current price this can create a potential bullish buy signal adversely if vwap has been high and spikes to the downside it can be a bearish sell signal indicating that the security is expected to trend lower following the cross pattern using a vwap trendline and vwap cross can help a technical analyst to detect price movement in securities that may not yet be fully factored into the security s short term or long term price 