Home The Technical Indicator Series
Anchored VWAP
Which Anchors Actually Work — Technical Analysis for Stocks and Swing Trading, Tested on 29 Million Trading Days
Where should you anchor your VWAP? This book tested the answer on 29 million trading days.
Anchored VWAP is one of the most useful lines on a chart, and the advice on where to draw it is rarely checked. The standard guidance says anchor at a swing low, a big-volume day, or the start of the year. This book puts that guidance to the test across 18,416 American companies and 29 million trading days, measuring every anchor against a line started on a random day in the same stock and year.
With 31 full-color charts drawn from the study's own data, you can see each result rather than take it on trust.
What you will be able to do:
- Choose your anchor on evidence. Draw from the year's low in a stock that has been badly hurt: it kept price above the line on 14.7 more days in every 100 than a random line. Use the year's high as a ceiling over a stock that has just made a new high. Use the most recent clear swing low for everything else.
- Stop drawing lines that do nothing. The quarter and month opens measured as zero.
- Read any line in seconds: slope first, side second. Price below a rising line was the strongest state in the study, and the rarest, on 3.2 percent of days.
- Match the line to your time frame. Swing anchors are strongest in their first three months. The 52-week anchors keep about nine-tenths of their value for a year.
- Know when not to trust a touch. In years a stock was making new 52-week lows, the week after a touch was worse than an ordinary week.
- Recognize the markets where the tool weakens. In a strong melt-up like 2021 the 52-week anchors shrank to less than half their usual size, and in no single year did they reverse.
Written in plain English. You do not need statistics to use this book. Every findings chapter opens with an In Plain English summary of what was found and what to do, and a Quick Reference puts the whole method on a few pages to keep beside your chart.
Honest by design. Every question was fixed before the data was run, and every answer is printed, including the ones that came back empty. Two anchors are reported as withheld because the evidence could not settle them.
A companion to VWAP for Beginners. If that book taught you the line, this one shows you where to draw it. It also stands on its own.
Draw the line where the evidence says it works.
Look inside
A few of the book's figures. Select one to see it full size.
- Figure 1.1: two anchors, two answers
- Figure 6.1: what a control is
- Figure 9.1: the same rule, eighteen months apart
- Figure 22.1: two tools wearing one name
Who it's for
Swing and position traders working on daily and weekly charts who want to know which anchor to choose, and complete beginners, since Part I assumes nothing.
Where to go next
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