VWAP Indicator with Bands on Bitcoin

What it shows

A blue line over the price that restarts at the start of each period (each UTC day by default). Up to three pairs of bands sit above and below it, and the area between each pair is lightly shaded. Only the first pair is on at the start.

How Pravex works it out

1. For each candle, take the price source (hlc3 by default: high + low + close, divided by 3) and multiply it by the candle’s volume.
2. Keep a running total of price × volume and a running total of volume since the period began. VWAP = total of price × volume ÷ total of volume. A candle with no volume before any trading in the period leaves a gap.
3. The period resets 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 never happen on a crypto pair, so those choices give one anchor at the first candle on the chart and the VWAP never resets.
4. Bands in Standard Deviation mode sit at VWAP ± multiplier × deviation. The deviation is volume weighted too: the square root of (total of price² × volume ÷ total of volume − VWAP²). In Percentage mode the band sits at VWAP ± VWAP × multiplier ÷ 100.

Settings

Setting	Default	What changing it does
Hide on daily and longer	off	When on, the VWAP and its bands are not drawn on daily or longer candles.
Reset period	Session	When the running total restarts. A shorter period gives a line that hugs recent price, a longer one a slow line that averages weeks of trading.
Source	hlc3	The price used for each candle before it is weighted by volume. hlc3 is the average of high, low and close; you can pick open, high, low, close or another average.
Offset	0	Shifts the VWAP and its bands by that many candles, from −500 to 500. It moves the picture only and does not change any value.
How bands are measured	Standard Deviation	Standard deviation makes the bands as wide as the volume-weighted spread of price in the period. Percentage makes them a fixed percentage of VWAP, so 1 means 1 percent.
First band pair	on, 1	Switches the first pair of bands on and sets how many deviations (or percent) away from VWAP they sit.
Second band pair	off, 2	The second pair of bands, wider than the first, with its own multiplier.
Third band pair	off, 3	The third pair, the widest, with its own multiplier.

How traders read it

Many traders use VWAP as the fair price of the day. Price trading above it says buyers have been paying up, and a pullback to VWAP is watched as a place buyers might return. Price under it says the reverse. Execution desks also use it as a benchmark: a buy filled below the day’s VWAP counts as a good fill.

Take invented numbers: bitcoin opens the day at 100, rallies to 104, and VWAP sits at 102. A drop back to 102 that holds is read as buyers defending the average. A close under 102 with the bands turning down is read as the day’s tone changing. Traders often treat the first band as a normal stretch from VWAP and the outer bands as an extended one.

When it misleads

VWAP resets at midnight UTC for Session, which is a calendar rule and not the start of your own trading day, so right after the reset there are few candles and the line is jumpy. The line also lags: late in a long period each new candle barely moves the average. On this page the volume is Hyperliquid’s, one venue and not the whole market, so another exchange’s VWAP will differ. VWAP also says nothing about direction by itself.

Questions and answers

What is VWAP?

The volume-weighted average price since the period began. Busy candles count for more, so the line sits closer to where most volume traded.

When does VWAP reset?

At the start of the reset period you pick. The default, Session, resets at midnight UTC, so crypto’s 24-hour market is cut into UTC days.

What do the VWAP bands mean?

They show how far price has stretched from VWAP. In Standard Deviation mode a band at 1 sits one volume-weighted deviation away, so a wide band means a wide day.

Is there a VWAP for gold?

VWAP needs volume, and spot gold carries none. The TWAP page draws a plain time-based average on gold instead.

Related: Time Weighted Average Price, Visible Average Price, Auto Anchored Volume Profile, Relative Volume at Time, every indicator.