How to Add VWAP on thinkorswim
The VWAP on thinkorswim is a popular indicator that allows day traders to determine key price levels on the intra-day chart.
How to Add VWAP to thinkorswim Chart
1- Go to the chart tab.
2- Click the hourglass indicator as circled in the image below.
3- Type in VWAP in the search bar and click on it.
4- Press add selected.
5- Click apply, and the VWAP will be on your thinkorswim chart.
What is the VWAP Indicator on thinkorswim
The VWAP stands for the volume-weighted average price.
Day traders use it on their intraday charts, and it resets daily.
The VWAP represents the average price traders pay for a stock each day.
The VWAP indicator includes the upper and lower VWAP line as well.
By default, the upper VWAP is two standard deviations higher than the VWAP, and vice versa for the lower VWAP.
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Other thinkorswim Indicators
The VWAP is one of the many indicators available on thinkorswim. Other popular indicators include the volume profile, anchored VWAP, Ichimoku cloud, and RSI.
FAQ
Is there an anchored VWAP in TOS?
Yes, there is an anchored VWAP in thinkorswim. However, it is not a built-in study, but a custom script that you can download and install. Check out our anchored VWAP article to learn how to install it.
How do you use VWAP for swing trading?
VWAP isn’t great for swing trading since it is generally an intraday indicator. However, you can use the anchored VWAP more effectively for swing trading.
What is the default setting for VWAP?
The default setting for VWAP on thinkorswim is a one-day VWAP with a standard deviation band of 2. This means that the VWAP is calculated based on the volume-weighted average price of all trades executed during the current trading day, and that the band shows two standard deviations above and below the VWAP. You can change these settings by editing the study parameters.
What is the difference between VWAP and Bollinger bands?
VWAP and Bollinger bands are both volatility-based indicators that show bands around a central line. However, they have some key differences:
The central line of VWAP is based on volume-weighted average price, while the central line of Bollinger bands is based on simple moving average.
The bands of VWAP are based on standard deviation of price, while the bands of Bollinger bands are based on standard deviation of price relative to the moving average.
The bands of VWAP are symmetrical around the central line, while the bands of Bollinger bands are adaptive and can expand or contract depending on volatility.
Is VWAP a leading indicator?
VWAP is not a leading indicator, but a lagging indicator. This means that it does not predict future price movements, but reflects past price movements. However, it can still be useful for identifying trends, support and resistance levels, and entry and exit points.
Which indicator works best with VWAP?
There is no definitive answer to which indicator works best with VWAP, as different indicators may suit different trading styles, strategies, and preferences. However, some common indicators that are often used with VWAP are:
Volume Profile: To confirm the strength of price movements and signals generated by VWAP.
Moving averages: To identify long-term trends and filter out noise.
MACD: To detect momentum and trend changes.
RSI: To measure overbought and oversold conditions.
Ichimoku Cloud: The Ichimoku indicator on a 1 or 5-minute chart will work great with VWAP.
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