The indicator for binary options VWAP takes into account not only prices, like a simple moving average , but also transaction volumes, which makes it even more informative. Thanks to this feature, large institutional investors can determine who currently controls the market.

It is important to understand that the indicator for binary options VWAP does not predict the price movement of a financial instrument, but only assesses its current state relative to the influence of sellers or buyers on it. It is typically used to confirm a trend and determine support and resistance levels. Like any other technical analysis tool, the free VWAP indicator has its own application features. If you want to easily navigate the current market situation and make informed decisions about opening trades, do not miss the chance to understand its capabilities.

Content:

vwap chart

Characteristics of the indicator for binary options VWAP

Installing the indicator for binary options VWAP

The VWAP indicator is installed as standard in the MetaTrader 4 platform. To do this, you need to add it to the root folder of the terminal by selecting “File” in MT4 and then “Open data directory”. In the directory that opens, you need to go to the “MQL4” folder and then to “Indicators”, and then move all the files there. Templates are installed in exactly the same way, but are placed in the “templates” folder. For more detailed installation instructions, see our video:

Review and settings of the indicator for binary options VWAP

Note: VWAP is an abbreviation for “Volume Weighted Average Price”, which means “Volume Weighted Average Price”.

VWAP displays the average rate of a currency pair over a certain period, taking into account the weight of the transaction volume. This indicator consists of three lines representing monthly, weekly and daily periods.

lines of daily weekly monthly periods in vwap

Externally, it resembles moving averages or Bollinger Bands . The main difference between VWAP and moving averages is that the former places more emphasis on weighted volume. It calculates the average price based on it, which helps to accurately determine support and resistance levels, as well as places to enter and exit trades.

signals in vwap

The indicator gives medium-term signals when the weekly and monthly lines cross, which opens up opportunities for concluding transactions for both Call and Put purchases. For a shorter-term strategy, you should wait until the daily and weekly lines cross. Moreover, for purchases, the monthly VWAP must be lower than both of these values, and for sales, on the contrary, higher.

monthly vwap value

Although it works on any time frame , it is most effective when used on the hourly chart to minimize false signals. VWAP has practically no parameters. All its values ​​are calculated using the formula:

Price = (Total Price for the period * Current Volume)/Total Volume for the period.

All that is available to the user is turning on and off lines of different periods: from daily to monthly.

settings in vwap

Trading rules using the indicator for binary options VWAP

The VWAP indicator can be a good alternative to standard support and resistance levels. It is often used during pullbacks, which is especially useful for trend-following traders. If you are having difficulty identifying the main trend in the market, we recommend reading these articles. In them we talk about alternative tools that do a good job of this task:

To increase the percentage of profitable trades, we will use a volatility filter based on the Standard Deviation indicator. We will react only to those intersections of daily and weekly VWAP that are accompanied by an increase in StdDEV(7) relative to the moving average with a period of 21, constructed from its values.

stddev indicator in vwap

Buying a Call Option

  1. Weekly VWAP is above Monthly
  2. Daily crosses Weekly from bottom to top
  3. StdDEV(7) is greater than SMA(21) (built from StdDEV(7))
  4. At the opening of a new candle buy a Call option

call option buy signal

Buying a Put Option

  1. Weekly VWAP is below Monthly
  2. Daily crosses Weekly from top to bottom
  3. StdDEV(7) is greater than SMA(21) (built from StdDEV(7))
  4. At the opening of a new candle, buy Put option

signal to buy put option

It is recommended to select the expiration time of 4 candles. Select the period for holding positions depending on the financial instrument and the results of testing on historical data.

Specifics of using the indicator for binary options VWAP

To improve trading results, you can use not only StdDEV, but also other tools for assessing trend strength, such as the ADX indicator . When a currency pair's quotes are in a range, the VWAP appears as a horizontal line, allowing it to be used as a support and resistance level. At the same time, on trend days, the indicator lines will be directed up or down, and their angle of inclination will change depending on the strength of the trend.

Pros of the VWAP indicator

It is an excellent alternative to classic moving averages and is often used by investors to determine when to buy or sell assets. Additionally, traders can use this indicator to identify strong price levels as well as confirm the current trend. This feature makes it a useful technical analysis tool in various trading strategies.

Disadvantages of the VWAP indicator

Disadvantages of VWAP include its dependence on trading volume, making it less effective during periods of low liquidity. It is also worth taking into account the lag of its values ​​from the price, which may make it difficult to use it for precise entry or exit from transactions. Therefore, a volatility filter was added.

During a flat, this indicator may provide insufficient information or create false signals, since it often looks like a regular horizontal line. Another disadvantage is its sensitivity to the calculation period: using different intervals to calculate indicator values ​​can lead to different results, which complicates the interpretation of signals and application in different market conditions.

Conclusion

The indicator for binary options VWAP is a fairly important tool in the arsenal of traders and investors. It is an excellent alternative to the classic moving average and is widely used to determine when to buy or sell assets. Additionally, VWAP allows traders to identify important price levels as well as confirm the current trend. Don't forget - this indicator is available for free, which makes it even more attractive.

If you want to get more information about binary options trading and learn about other useful tools, follow the links in this review. On our website you will find many articles, tips and recommendations that will help you become a successful trader. In the meantime, we suggest you practice ona demo account opened with one of the brokers with a minimum deposit . Trade while following the rules of risk and capital management. We wish everyone a favorable trend!

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See also:

How to make money on binary options

How do binary options brokers make money?

Top 5 Binary Options Trader Mistakes

Binary options trading platforms

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Трейдер БО
Трейдер БО
Обыкновенный МА каких много. И достоинства и недостатки прежние. Что перевесит?
Богдан, Как правило перевешивают достоинства, а с недостатками мирятся.)))
Трейдер БО, Единственное что перевешивает - он бесплатный.
Богдан, дело в том что МА один из самых распространенных индюков. Его делают кто ни попадя. И видов их навалом. Зачем еще один.
25 June 2024
Answer
Богдан
Богдан
Обыкновенный МА каких много. И достоинства и недостатки прежние. Что перевесит?
Богдан, Как правило перевешивают достоинства, а с недостатками мирятся.)))
Трейдер БО, Единственное что перевешивает - он бесплатный.
25 June 2024
Answer
Трейдер БО
Трейдер БО
Обыкновенный МА каких много. И достоинства и недостатки прежние. Что перевесит?
Богдан, Как правило перевешивают достоинства, а с недостатками мирятся.)))
14 June 2024
Answer
Богдан
Богдан
Обыкновенный МА каких много. И достоинства и недостатки прежние. Что перевесит?
14 June 2024
Answer
игорь
Статья о VWAP (взвешенное по объему среднее значение) предоставляет глубокие знания об этом техническом индикаторе. Она четко объясняет его расчет, интерпретацию и применение в торговле. Автор подробно описывает различные способы интерпретации VWAP, подчеркивая его полезность для идентификации зон поддержки и сопротивления, оценки силы тренда и определения потенциальных точек разворота. Мне особенно понравились практические примеры, иллюстрирующие, как использовать VWAP для принятия обоснованных торговых решений. Автор также подчеркивает важность сочетания VWAP с другими техническими индикаторами для всестороннего анализа рынка. В целом, эта статья является ценным ресурсом для трейдеров, желающих улучшить свое понимание VWAP и внедрить его в свои торговые стратегии. Ее جامعное и практическое изложение делает ее обязательным чтением для всех, кто стремится к успеху на финансовых рынках.
13 June 2024
Answer
tirant
tirant
Обычная МА с осцилятором. Радует что бесплатный.
Артур, Вот в этом - то и дело что вроде обычная, а немного нет. МА при флете все молчат. в комбинации с чем-то нормально.
13 June 2024
Answer
Артур
Артур
Обычная МА с осцилятором. Радует что бесплатный.
13 June 2024
Answer
Илья
Когда котировки валютной пары находятся в диапазоне, VWAP выглядит как горизонтальная линия, можно использовать его в качестве уровня поддержки и сопротивления. В то же время, в трендовые дни линии индикатора будут направлены вверх или вниз, а их угол наклона будет меняться в зависимости от силы тренда. 👌
13 June 2024
Answer
Руслан
Руслан
Интересно посмотреть как он будет вести себя в случае применения мультитаймфреймового подхода. Насколько в таком случае будут менять объемы торгов и можно будет выявить общий и второстепенные тренды.
13 June 2024
Answer
Руслан
Руслан
Специфический индикатор, это действительно неплохая альтернатива приевшимся уровням поддержки и сопротивления, но поскольку линии пересекаются не так часто как хотелось бы, то здесь без доп фильтра не обойтись. Хорошо что он хотя бы бесплатный.
Option Bull, хорошо что у авторов хотя бы хватило совести не брать за это деньги) Меня улыбнуло что в статье написано какая это хорошая альтернатива скользящим средним, но по итогу выяснилось, что без без них никак, если речь заходит о подтверждении сигналов))
13 June 2024
Answer
Option Bull
Option Bull
Специфический индикатор, это действительно неплохая альтернатива приевшимся уровням поддержки и сопротивления, но поскольку линии пересекаются не так часто как хотелось бы, то здесь без доп фильтра не обойтись. Хорошо что он хотя бы бесплатный.
13 June 2024
Answer
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