Written by Katie Gomez

Trade ideas had a new proprietary add-on for your Trade Ideas subscription. It’s one of our most exclusive and valuable products yet. This new product launch collaborates with Brian Shannon’s book: The Anchored Volume-Weighted Average Price (AVWAP).

In his new book, Maximize Trading Gains with Anchored VWAP, Shannon discusses his new trading innovation, the Anchored VWAP, a tailored version of the VWAP indicator. Now, there are a lot of different indicators traders use, so what is unique about the AVWAP? 

Many indicators help track a stock’s moving average but usually have inconsistencies or gaps in their systems. However, the VWAP is a technical analysis indicator that considers a key factor often missed when tracking moving averages: volume. The VWAP appears as a single line on charts, looking similar to the moving average but smoother, as its findings are more consistent than your standard moving average. It is a benchmark to represent the average price a security has traded at throughout the day, based on volume as well as price. 

VWAP represents a view of price action throughout a day’s trading sessions. VWAP is an essential tool for traders because it provides insight into both the trend and value of a security. It is especially advantageous to short-term traders as it helps determine intraday price trends and resets at the start of each new trading session. 

Moving averages only consider price, so the volume factor offered by VWAPS can change the line entirely. So, for example, when a stock shows lighter volume, it trades at a higher price and draws a higher line than the regular moving average would show because there were more stocks traded at a higher price than initially thought.

In Brian Shannon’s new book, he has created a way to anchor and start calculating the basis point for a VWAP indicator, calling it the anchor. When a stock has news and good earnings, it gaps up overnight to trade higher the following day, and that interest driving everyone to want to buy it is generating volume. Volume can surpass price at this point because herd mentality kicks in; people want to buy it because everyone else is rushing to, tailoring the VWAP into an emotional indicator.

Shannon has created a way to use the anchor from an emotional group event, the point where a mass consciousness of people has all risked their money at a certain price. Now, after a certain period (20, 30, or 40 days later), if that price continues to move above the anchored VWAP line from that particular news event, investors are happy, and the consensus is good. 

However, if it dips below that precedent line, people start to get nervous and feel what it feels like to lose money, a feeling all traders know well. That said, the Anchored VWAP is an excellent gauge of crowd psychology, impacting results based on who feels good or bad after that critical event. 

This anchor requires a critical event to serve as a precedent, which can look like the initial public offering for the stock, the earnings date, or a news event. We can also use Anchored VWAP from extreme lows and extreme highs on the chart. The Anchored VWAP can become a vital tool for traders but is expendable without knowing how to implement it. 

Even with the information, many traders struggle with drawing the line correctly; this is where Trade Ideas comes in to help. Trade Ideas’ new Anchored VWAP product will automatically draw the lines for you on the chart. With this product, you won’t have to question if you drew the line correctly, as we draw for you. Additionally, the product offers various set-ups based on the ones from Shannon’s book, including AVWAP pinch, the pullback to the AVWAP, and IPO.

It will also include numerous other examples from his book that become real case scans. Since trade ideas offer exclusive real-time data, our system will do most of the work; you won’t have to manually input the symbols, as our program will find new symbols based on the teachings found in the book. 

Visit Trade Ideas today if you want in on this exclusive new product. This product is available for purchase for only $49/ month for users with a Trade Ideas subscription.