Re-Anchoring VWAP Triple

27 Nov 2023

The Triple Re-Anchoring VWAP (Volume Weighted Average Price) indicator is a tool designed for traders seeking a deeper understanding of market trends and key price levels. This indicator dynamically recalibrates VWAP calculations based on significant market pivot points, offering a unique perspective on potential support and resistance levels.

Key Features:

1. Dynamic Re-anchoring at All-Time Highs (ATH): The first layer of this indicator continuously tracks the all-time high and recalibrates the VWAP from each new ATH. This VWAP line, typically acting as a dynamic resistance level, offers insights into the overbought conditions and potential reversal zones.
   
2. Adaptive Re-anchoring to Post-ATH Lows: The second component of the indicator shifts focus to the market's reaction post-ATH. It identifies the lowest low following an ATH and re-anchors the VWAP calculation from this point. This VWAP line often serves as a dynamic support level, highlighting key areas where the market finds value after a significant high.
   
3. Re-anchoring to Highs After Post-ATH Lows: The third element of this tool takes adaptation one step further by tracking the highest high achieved after the lowest low post-ATH. This VWAP line can act as either support or resistance, providing a nuanced view of the market's valuation in the recovery phase or during consolidation after a significant low.
   

Applications:

• Trend Confirmation and Reversal Signals: By comparing the price action relative to the dynamically anchored VWAP lines, traders can gauge the strength of the trend and anticipate potential reversals.
  
• Entry and Exit Points: By highlighting significant support and resistance areas, it assists in determining optimal entry and exit points, particularly in swing trading and mean reversion strategies.
  
• Enhanced Market Insight: The dynamic nature of the indicator, with its shifting anchor points, offers a refined understanding of market sentiment and valuation changes over time.
  

Why Triple Re-Anchoring VWAP?
Traditional VWAP tools offer a linear view, often missing out on the intricacies of market fluctuations. The Triple Re-Anchoring VWAP addresses this by providing a multi-faceted view of the market, adapting not just to daily price changes but pivoting around significant market events. Whether you're a day trader, swing trader, or long-term investor, this indicator adds depth to your market analysis, enabling more informed trading decisions.

Examples: