Anchored VWAP: The Only Trading Tool You Need

Introduction

The video introduces the Anchored V-WOP tool and its benefits.

What is Anchored V-WOP?

• The Anchored V-WOP is a drawing tool that uses the same calculations as the regular V-WOP but allows you to select the exact candle where you want the calculations to begin.

• It can give you a better understanding of the value of multi-day trends and help you identify areas where breakouts may occur.

Topic 1: What is Anchored V-WOP?

This section explains what anchored v-wop is and how it differs from regular v-wop.

What is V-WOP?

• Volume Weighted Average Price (V-WOP) stands for volume weighted average price, which uses volume as an additional input to calculate the day's average price.

• It shows us the perceived value of an asset for that day.

Limitations of Regular V-WOP

• Regular v-wop starts its calculations from the opening of the day, so at any given moment, its value is only based on current day price action.

• It has no value for swing traders who want to use higher time frames to trade.

Benefits of Anchored V-WOP

• The anchored v-wop uses the same calculations as regular v-wop but allows traders to plot it from major reversal points or starting points of trend moves.

• It provides support and resistance levels that are more relevant than those provided by regular v-wop.

Topic 2: How to Apply Anchored V-WOP on Charts

This section explains how to apply anchored v-wop on charts using TradingView.

Steps to Apply Anchored V-WOP on Charts

1. Head over to TradingView, a free charting website.

2. Hover over to the left where you will see the drawing tools, then select the arrow beside the second option to open a drop-down menu.

3. Go all the way down that list and select the anchored v-wop.

4. Click on any candle, and the tool will plot itself starting from that price.

Topic 3: How to Use Anchored V-WOP

This section explains how to use anchored v-wop effectively.

Plotting Anchored V-WOP

• Ideally, traders should plot anchored v-wop from major reversal points or starting points of trend moves.

• It gives traders an asset's fair value within a trend.

Catching Pullbacks

• The anchored v-wop is one of the finest tools or indicators that traders could use to catch pullbacks.

• In an uptrend, when the price goes below the v-wop, this means that the asset is trading at a lower price than its fair value.

• Big players see this opportunity and their buying orders take prices above the v-wop.

• In a downtrend, when prices start to trade above anchored v-wop sellers are getting a higher price than its fair value so they jump on opportunities and create selling pressure.

Conclusion

The video concludes by summarizing how traders can benefit from using anchored v-wop in their trading strategies.

Benefits of Using Anchored V-WOP

• The Anchored V-WOP tool provides support and resistance levels that are more relevant than those provided by regular V-WOP.

• It helps traders identify areas where breakouts may occur and catch pullbacks effectively.

Anchored V-WOP Strategies

This section covers the use of anchored v-wop as a support and resistance indicator in uptrends and downtrends. It also discusses the use of breakouts as a sign of trend reversal.

Anchored V-WOP as Support and Resistance

• The anchored v-wop provides support to the price in an uptrend and resistance in a downtrend.

Breakouts

• When the price breaks out of an anchored v-wop after a sustained trend, it is a sign that the trend has lost momentum and a reversal may be in the cards.

• Breakouts can be fake, so it's necessary to add other confirmations to create a winning strategy.

Anchored V-WOP Bands

This section covers how to use anchored v-wop bands to determine zones of support or resistance instead of just using a line.

Creating Bands with Anchored V-WOP

• To create bands with anchored v-wop, identify the starting point of an uptrend/downtrend and plot an anchored v-wop from there. Then, identify the first pullback in the trend and plot another anchored v-wop from that point. The resulting bands can be held for months or even years.

• Pullbacks near the v-wap bands are expected to find support/resistance before moving upwards/downwards respectively.

Anchored V-WOP Plus Fibonacci Retracement

This section covers how to combine Fibonacci retracement levels with anchored v-wop to spot areas where the price might find pullbacks.

Combining Fibonacci Retracement with Anchored V-WOP

• To combine Fibonacci retracement with anchored v-wop, identify an already established uptrend/downtrend and plot an anchored v-wop from the latest high/low. Then, draw a Fibonacci retracement tool from the latest high/low to the new low/high. The resulting pullbacks near the anchored v-wop are expected to find support/resistance before moving upwards/downwards respectively.

Stop Loss and Targeting Recent Lows

In this section, the speaker discusses a trading strategy that involves placing stop loss above the v-wop or 50 percent after an inside bar. The speaker also explains how to target recent lows.

Trading Strategy

• Place stop loss above the v-wop or 50 percent after an inside bar.

• Target recent lows.

Buy Setup Using Same Logic

In this section, the speaker explains a buy setup using the same logic as in the previous section.

Buy Setup

• Plot anchored v-wop from starting point of up move.

• Draw Fibonacci retracement when price makes pullback and approaches v-wop.

• Expect strong support at 0.38% level where v-wop falls in confluence with it.

• Look for Morning Star pattern indicating bullish reversal.

• High probability trade resulting in profits.

Anchored V-WOP and Key Levels Support and Resistance

In this section, the speaker discusses how anchored v-wop can be used in conjunction with key levels of support and resistance to identify high probability trades.

Downward Trend Example

• Plot anchored v-wop from starting point of down move.

• Expect downside reversal when price pulls back to v-wop.

• Identify key level using two previous reversals.

• Anchored v-wop and key level converge at one point providing double confirmation of potential resistance.

• Logical implication to place sell trade here.

Upward Trend Example

• Plot anchored v-wop from starting point of upward trend.

• Expect price to bounce off v-wop line when it pulls back to it.

• Identify key level using previous reversal as support level.

• Anchored v-wop and support level converge at one point providing double confirmation of potential support.

• Logical implication to place buy trade here.

Conclusion

In this section, the speaker concludes the video by summarizing the three advanced trading strategies using anchored v-wop.

Summary

• Anchored v-wop is a powerful tool for identifying high probability trades.

• Stop loss should be placed above v-wop or 50 percent after an inside bar.

• Target recent lows when using this strategy.

• Buy setup involves plotting anchored v-wop from starting point of up move and drawing Fibonacci retracement when price makes pullback to approach it.

• Look for Morning Star pattern indicating bullish reversal in buy setup.

• Anchored v-wop can be used in conjunction with key levels of support and resistance to identify high probability trades.

• Downward trend example involves placing sell trade where anchored v-wop and key level converge at one point providing double confirmation of potential resistance.

• Upward trend example involves placing buy trade where anchored v-wop and support level converge at one point providing double confirmation of potential support.