All language subtitles for 4. Structures + VWAP

Another important use is the VWAP.

As mentioned above, like the VPOC, the
VWAP is a level that establishes control

in the shorter term.

With this in mind, one input we should
take into account when considering

possible scenarios is the position of
these VWAPs relative to the price.

If we see a potential spring action, the
effect of which does not subsequently

position above the VWAP, this is
certainly a sign of weakness.

The examples have been taken from the
weekly VWAP, which is the one I use when

analyzing multi -day structures.

Such a lack of strength would have
suggested some bearish control, and even

entry in the opposite direction could
have been judged as a genuine bearish

breakout event.

Remember that all market action must be
confirmed or rejected by subsequent

price action.

In this case, we were trying to confirm
a potential spring.

and to do that we should require the
price to break the VWAP and position in

favor of it.

As I always say, this trace is the ideal
behavioral signal.

This means that the more signals we
identify, the more confidence we have in

opportunity, but the less profit
potential we have.

This is why the entries on total shocks
are the most profitable, but also the

most risky.

It is up to the trader to assess this
and adjust according to their management

preferences.

Here is another example in the opposite
direction.

A potential bullish move that manages to
push the price back below the previous

highs, but hits hard against the VWAP,
which acts as a support and prevents the

price from effectively trading below it.

It is certainly a sign of strength that
the market has not allowed the price to

break through this level.

What is even more curious about this
particular structure is that, a priori,

seems to fulfill some of the
characteristics of the distributive

such as the volume spikes during its
development.

But what is ultimately more important is
what the price does in real time.

And what it has done here is to fail in
its attempt to trade at lower levels,

which makes a clear sense of such an
action.

It is different when, after the
potential upthrust, the price recovers

and positions itself in favor of it, as
in these two examples.

In the chart on the left, we see how the
market initiates a weakness move after

the potential upthrust, pushing the
price below the weekly VWAP, only to

to it later, creating a short
opportunity.

And in the chart on the right, we see
the same causistry for the cumulative

example.

After all this failed discovery at the
bottom, which acts as a potential

the price has the ability to reposition
itself above the VWAP, leaving several

tests that could have been used as
triggers for a long entry.

As we can see that the use of the VWAP
can be crucial on some occasions, we

should add the position of the price in
relation to this level as another input

to consider in our operational
checklist.