Why Does VWAP Work?

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Have you ever stopped to wonder why a certain trading strategy works?

Why does that unique combination of candles make a valid setup?

Well, understanding why the VWAP works is a great starting point…

Why?

VWAP is an institutional benchmark of value.

Many algos are designed to match the VWAP, and beating the VWAP on an order worked throughout the day is a target for many dealers.

So, the typical bounce off the VWAP trade is something that has a lot of meaning behind it.

In this episode, I explain why I believe the VWAP trade works and explore the thinking behind it.