VWAP: a session reference, not a trend line
The difference between VWAP and a moving average is that VWAP weights every price by the volume traded at it. A price where heavy volume changed hands pulls the line towards it far more than a price the market passed through on almost nothing. That is why day traders read it as “today's average cost”: above it, buyers are paying more than the session average; below it, sellers are accepting less.
- ▸The calculation starts at the day's open and resets at midnight UTC — 03:00 Gulf time.
- ▸It steadies as the session progresses, because accumulated volume is hard to shift with one candle.
- ▸It is unavailable on the daily timeframe: one candle already equals the whole session, so the reading loses its meaning.
- ▸In the workspace it is switched on as “Session VWAP” from the on-candle studies.
Bollinger Bands: a volatility gauge, not an entry signal
The bands are three lines: a twenty-candle simple average in the middle and an upper and lower edge two standard deviations away. When the market calms, the edges squeeze towards the mean; when movement opens up, they spread. Touching the upper edge does not mean “buy” or “sell” — it means price is at the top of its usual volatility range over the last twenty candles.
Bands squeezed for a long stretch
- What it means
- Low volatility and accumulation; the next move is likely wider
- What it does not mean
- Which direction that move takes
Price tags the upper edge, far from VWAP
- What it means
- A clear stretch from both the session average and the twenty-candle mean
- What it does not mean
- That a reversal is due right now
Price rebounds from the lower edge towards the mean
- What it means
- A return to the middle of the range — the most repeated behaviour of all
- What it does not mean
- That a bottom has formed
Edges widening alongside long candles
- What it means
- Genuine range expansion and higher participation
- What it does not mean
- That the move will last to the session close
Reading the two together
The two measure different distances: VWAP measures distance from the volume-weighted average of the day, Bollinger measures distance from the twenty-candle mean in units of volatility. The strongest readings are where they agree — price above VWAP and tagging the upper edge is stretched on both measures, while price above VWAP but mid-band is a calm trend that has not stretched yet.
Stretched trend
- Versus VWAP
- Above
- Inside the bands
- At the upper edge
- Short read
- Strong move, far from its own average
Calm trend
- Versus VWAP
- Above
- Inside the bands
- Mid-band
- Short read
- Orderly advance with room left
Intraday weakness
- Versus VWAP
- Below
- Inside the bands
- At the lower edge
- Short read
- Extended selling; a move back to the middle is common
Indecision
- Versus VWAP
- Crossing it
- Inside the bands
- Squeezed bands
- Short read
- No trend; wait for the bands to widen
Switching both on in the workspace
- 1Open the chart workspace and pick an intraday timeframe (fifteen minutes or one hour).
- 2From the studies menu switch on “Session VWAP” and “Bollinger 20” under “On the candles”.
- 3Or choose the “volatility” preset, which sets both layers in one click.
- 4For a clean comparison, switch the moving averages off for a moment so only the two references remain on the candles.
- 5At the level you care about on the upper or lower edge, draw a horizontal line and set an alert on it.