The Full VWAP Indicator is a popular technical analysis tool used to measure the average price of an asset for a specific period of time. In this article, we will discuss the definition, working, and best settings of the Full VWAP Indicator, and how to use it to trade in MT5.
Definition
The Full VWAP Indicator, also known as the Volume Weighted Average Price, is a technical analysis tool used to measure the average price of an asset for a specific period of time. It is calculated by taking the sum of the product of volume and price for each transaction, and dividing it by the total volume.
Working of Full VWAP Indicator in MT5
The Full VWAP Indicator works by calculating the average price of an asset based on its trading volume. The indicator takes into account the volume of each transaction and the price at which it occurred, and calculates the weighted average price for a specific period of time.
Traders can use the Full VWAP Indicator to identify key price levels and potential support and resistance areas. The indicator is particularly useful for traders who use volume-based trading strategies.
Best Settings for Full VWAP Indicator
The best settings for the Full VWAP Indicator depend on the trading strategy and the time frame being used. Generally, a shorter time frame, such as 5 minutes or 15 minutes, is used for intraday trading, while a longer time frame, such as 1 hour or 4 hours, is used for swing trading.
Traders can also adjust the sensitivity of the Full VWAP Indicator by changing the period used in the calculation. A shorter period will result in a more sensitive indicator, while a longer period will result in a smoother indicator.
Table of Best Settings for Full VWAP Indicator
The table below shows the best settings for the Full VWAP Indicator for different time frames:
| Time Frame | Period | Color |
|---|---|---|
| Intraday | 20 | Blue |
| Swing | 50 | Green |
Traders can also customize the appearance of the Full VWAP Indicator by changing the color of the lines and other settings.
How to Trade with Full VWAP Indicator?
The Full VWAP Indicator can be used to identify key price levels and potential support and resistance areas. Here are two common ways to use the Full VWAP Indicator to trade in MT5:
Identify Key Price Levels
Traders can use the Full VWAP Indicator to identify key price levels that may act as support or resistance. When the price is trading above the Full VWAP line, it indicates that the asset is in an uptrend and traders should look for buying opportunities. When the price is trading below the Full VWAP line, it indicates that the asset is in a downtrend and traders should look for selling opportunities.
Use as a Confirming Indicator
Traders can also use the Full VWAP Indicator as a confirming indicator to validate other technical analysis tools or trading signals. For example, if a trader receives a buy signal from another technical analysis tool, they can use the Full VWAP Indicator to confirm that the market momentum is strong and that the buy signal is more likely to be successful.
Features of Full VWAP Indicator
The Full VWAP Indicator has several features that make it a useful tool for traders. Some of these features include:
- Measures the average price of an asset based on its trading volume
- Customizable settings to suit different trading strategies
- Can be used to identify key price levels and potential support and resistance areas
Conclusion
The Full VWAP Indicator is a powerful tool that can help forex traders identify key price levels and potential support and resistance areas. By incorporating the Full VWAP Indicator into their trading approach, traders can gain an edge in the markets and improve their chances of success.