Home The Technical Indicator Series
Anchored VWAP
Which Anchors Actually Work — Technical Analysis for Stocks and Swing Trading, Tested on 29 Million Trading Days
This book is about one line on a chart, and about whether it does what everybody says it does.
Two people who start counting on the same bar get the same line to the cent.
An anchored VWAP starts counting from a bar you choose, and from then on it tracks the average price everyone who bought since that day actually paid, weighted by how many shares traded at each price. It sits between the lines you draw by judgment and the indicators you calculate: you supply one bar, chosen for a reason, and the arithmetic supplies everything else.
The hard question is which bar. Roughly two-thirds of this book is measurement: nine ways of choosing an anchor, each tested against a line started on a random day in the same stock and year, across every US company with real volume over thirty-six years and 29 million trading days. Some of what you've been told about this tool holds up. Some of it doesn't. The book says which, and shows the working.
Every claim gets one of five plain verdicts, from “survives every test” to “no measurable effect,” and results too unsteady to trust are withheld rather than reported. Every rule is stated precisely in an appendix, so any number can be checked.
It assumes you know nothing. Part I builds VWAP and the anchor from the ground up, and Chapter 5 shows you how to put a line on your own chart. Readers of VWAP for Beginners can start at Chapter 6. The focus is daily and weekly charts, for positions held for weeks or months; day trading is covered in VWAP for Beginners.
Inside the book
- What a volume-weighted average is, what an anchor is, and how to put one on your chart
- How to read the evidence, and why every anchor is measured against a random line
- The anchors that held up, and why the year's low and the year's high are not mirror images
- The anchors that don't, including why the calendar does nothing
- Reading the line: slope first, side second; what happens at a touch; and using two anchors at once
- How long an anchor lasts, when it fails, and every claim in one table
Twenty-four chapters in six parts, 31 figures, a quick reference, and five appendices.
Look inside
A few of the book's figures. Select one to see it full size.
- Figure 1.1: two anchors, two answers
- Figure 6.1: what a control is
- Figure 9.1: the same rule, eighteen months apart
- Figure 22.1: two tools wearing one name
Who it's for
Swing and position traders working on daily and weekly charts who want to know which anchor to choose, and complete beginners, since Part I assumes nothing.
