About VWAP Calculator (Formula)
The VWAP (Volume-Weighted Average Price) is a popular trading indicator used to determine the average price of a security over a given period of time, typically a trading day. The VWAP is calculated by adding up the dollars traded for every transaction (price multiplied by the number of shares traded) and then dividing by the total shares traded for the same period. The formula for calculating the VWAP is as follows:
VWAP = (Typical Price x Interval Volume) / Cumulative Volume
- The typical Price is the sum of high, low, and closing prices divided by 3.
- Interval Volume is the number of shares or contracts traded during a specific time interval.
- Cumulative Volume is the total number of shares or contracts traded over a certain period of time.
This calculator is helpful for traders and investors to understand how the current price compares to the average price over a certain period, and to also identify the buying and selling pressure on the stock, VWAP is often used by traders as a benchmark to measure the performance of their intraday trades
It’s important to note that this is a basic example, and you may need to customize it according to your needs and requirements.