← Learn · Lesson 08 of 11
Anchored VWAP is a running average price started from a moment that mattered: an earnings gap, a major high, a crash low. It is the break-even of everyone who bought since that anchor. When price returns to the line, that cohort decides together to defend, add or bail, which is why it acts as support or resistance.
VWAP is the average price everyone paid, weighted by how much traded at each level. Anchored VWAP starts that average from a specific moment that mattered: an earnings gap, the top of the last rally, the day of a crash. That one choice turns a generic average into something much sharper.
Institutions watch this line closely, because it answers a question that matters to size: is the average buyer since the event under water or in profit? A stock reclaiming its earnings-gap AVWAP is a different animal from one bleeding below it, even at the same price.
Elliott and Wyckoff tell us roughly where a turn should happen. AVWAP gives us the exact price to watch for it: the specific level where the crowd's break-even sits. That's how a structural read becomes a tradeable entry, stop, or target.
Common questions
What is anchored VWAP?
Anchored VWAP is the volume-weighted average price starting from a chosen moment, not the whole session. Anchored to an event that traders remember, an earnings gap, a major high or low, it becomes the collective break-even of everyone who has traded since that point.
Why does anchored VWAP act as support or resistance?
Because it marks a whole cohort's break-even. When price falls back to the line, everyone who bought since the anchor is at even at once, and they decide together to defend, add or bail. That shared decision is what turns the line into support or resistance.
Where should you anchor a VWAP?
To events, not dates. Anchor to the last major high, low or gap, a moment traders actually priced around. Anchoring to an arbitrary Tuesday tells you nothing, because no cohort formed there.
How does anchored VWAP fit the method?
Elliott Wave and Wyckoff say roughly where a turn should happen; anchored VWAP gives the exact price to watch, the level where the crowd's break-even sits. It is strongest in confluence, where the line lands where the wave count already expects support.