TWAP Indicator: Time-Weighted Price on Gold

What it shows

One red line over the price that restarts at the start of each period. It moves slowly, since it is an average of everything since the reset, and it flattens as the period gets longer.

How Pravex works it out

For each candle, take the average of its four prices: (open + high + low + close) ÷ 4.
Add that to a running total since the period began and divide by the number of candles so far. TWAP = running total ÷ candle count.
The running total restarts at the start of the reset period: Session is one UTC day, Week starts on Monday, then Month, Quarter, Year, Decade or Century. Earnings, Dividends and Splits do not happen on a spot gold or crypto chart, so those choices give one period from the first candle on the chart and the line never resets.
Because each candle counts once, TWAP depends on the candle size you chart: on 15-minute candles each quarter hour has the same weight, whatever was traded in it.

Settings

Setting	Default	What changing it does
Reset period	Session	When the average restarts. A short period gives a line that tracks the day, a long period gives a slow line that averages weeks. With Week, TWAP restarts on Monday at 00:00 UTC.

How traders read it

TWAP is used as a time-neutral price benchmark. It answers a simple question: where has price spent the period on average? Price well above TWAP means the market has pushed up and held there, and a return toward it is watched as a possible pause. Execution desks also use TWAP as a target when they spread a large order evenly through the day.

Imagine, with invented numbers, that gold opens the day at 100, trades at 104 for several hours and TWAP has crept up to 102. A dip to 102 is the average being tested. Compare it with a moving average: a moving average forgets old candles, while TWAP keeps every candle since the reset at equal weight.

When it misleads

The Session period resets at midnight UTC, but the gold trading day opens at 17:00 New York time, so the line restarts in the middle of a trading day and the first candles after it are jumpy. Gold has no weekend candles, so a Week period is five days of data. TWAP counts a quiet candle as much as a busy one and it lags by design. It carries no information on direction.

Questions and answers

TWAP or VWAP: how do they differ?

TWAP counts every candle equally. VWAP weights candles by volume. TWAP does not need volume, so it can be drawn on gold.

When does TWAP reset?

At the start of the reset period you pick. The default, Session, resets at midnight UTC.

How is Pravex’s TWAP calculated?

Each candle contributes the average of its open, high, low and close, and TWAP is the average of those figures since the period began.

Is TWAP a good support or resistance level?

Price does revisit it often because it is an average, but nothing makes it hold. Treat it as a reference point and look for confirmation from the candles around it.