Distance from VWAP: How Stretched Is Price?

What it is

VWAP is the average price paid since the reset, weighted by volume, so it is often treated as the day's fair price. Many intraday traders and large orders measure themselves against it.

This indicator turns the gap between price and VWAP into a single line, so you can see at a glance how extended the move is and compare today's stretch with previous days. On gold and index CFDs, VWAP is weighted by tick volume.

How it is calculated

1. For each candle since the reset, multiply its typical price, (high + low + close) / 3, by its volume. 2. VWAP = the running total of those values / the running total of volume. 3. Distance = (close minus VWAP) / VWAP x 100.

Settings

Setting	Default	Range	What it changes
Reset	day	choose from: day, week, session	When VWAP starts again. Day suits intraday trading; week gives a wider frame for swing trades; session resets at each trading session's start.

How to read it

Above 0Price is above VWAP. Buyers since the reset are, on average, in profit.

Below 0Price is below VWAP. Sellers are in control of the session so far.

Crossing 0Price has moved through VWAP; control of the session may be changing.

Far above its usual rangePrice is stretched above fair value. A snap back towards VWAP is more likely.

Shrinking towards 0 in a trendPrice is pulling back to VWAP, a common place for trend traders to rejoin.

How to trade it

1
Note how far from VWAP US30 typically stretches on your chart before turning, for example by checking the last 10 sessions.
2
For a pullback trade: in an up day with distance above 0, wait for price to fall back to VWAP (distance near 0).
3
Enter long on a bullish candle that closes back above VWAP.
4
Stop a little below VWAP, for example 30 to 50 points on US30.
5
Target the day's high, or 2 times the stop.

What proves it wrong

The pullback long is cancelled if price closes clearly below VWAP and the distance stays below 0 for several candles, showing sellers have taken the session.

How WickSpeak reads Distance from VWAP

WickSpeak writes a plain-English reading of Distance from VWAP on the live candle: what it is, how far price sits from the day's fair price right now, how to trade it and what would prove it wrong. In Playbook, a condition can check when the distance crosses above or below zero, stays above or below zero, or is rising or falling. VWAP itself is also among WickSpeak's key levels, shown with how many points away it is.

Best markets and timeframes

Built for intraday charts, 1 to 15 minutes, on US30, NAS100 and gold. The weekly reset suits 1 hour swing trades. It means little on daily and higher charts.

Common mistakes

Fading every stretch on a strong trend day. Price can stay far from VWAP all session.
Using a fixed percentage for every market. Gold and NAS100 stretch by different amounts.
Forgetting the reset time, which decides where VWAP starts and changes every reading.

Works well with

VWAPVolume Rolling VWAPVolume Bollinger BandsBands Opening rangeLevels

Questions traders ask

What does distance from VWAP tell you?

It tells you how far price has moved from the volume weighted average price since the reset, in percent. A large distance means price is stretched from the session's fair price.

Is price far from VWAP a reversal signal?

Not on its own. It shows a stretch, and stretches often pull back, but strong trend days can stay extended. Wait for a price signal before fading it.

When does VWAP reset?

By default at the start of each day. WickSpeak also offers a weekly reset and a session reset.

Does VWAP work on gold and forex?

Yes, using the tick volume your broker supplies. It is widely used on gold and index CFDs as an intraday fair price.

Distance from VWAP: measuring how stretched price is