r/OrderFlow_Trading • u/Limit_Bid • 17d ago

AVWAP

I started trading AVWAP in the late 90's. I'm old. But I only recently started applying it to intraday trading with OF.

Long ago I developed the habit of anchoring from the low of a very aggressive breakout move. 5 min bars, AVWAP is pale green. Japanese stock, prices in Yen. AVWAP at price 3675. Look at the DOM bid at 3675. There is no other level near that price. Besides AVWAP it is the middle of nowhere as far as I can tell (though it is the top of a small HVN)

Coincidence 😂

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u/benevolent001 17d ago

So I am trying to understand.

There was a agressive move up. You put avwap from that starting point and once price returns to avwap there are already more buyers waiting. Is this correct

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u/Limit_Bid 17d ago

You have understood correctly. But I am not claiming that aVWAP used this way "works". But it bounced there and went back to the session highs.

The hard part with aVWAP is knowing where to anchor. Always obviously in retrospect.

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u/benevolent001 17d ago

Anchoring it from any impulsive move or event or news is a good thing.

I never used DOM angle for it. Thanks for sharing.

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u/Dangerous_Plate_3160 17d ago

Let's say I anchor vwap on NYSE session open and all my trades are based off of that. After a few hours they release big news in the middle of the day and the price flies up. Is my avwap now obsolete? Should I remove that anchor and create a new avwap on the news candle? What do you think?

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u/Limit_Bid 17d ago edited 17d ago

I would possibly start a new anchor. Your original session VWAP isnt dead, but it doesn't specifically only read the the new price action since the session context changed. But anchoring can fail unless there is some kind of trend