If you had to keep only one marker on an intraday chart, many traders would choose the VWAP. Behind this slightly technical acronym lies a very simple idea: knowing whether the price is rather expensive or cheap right now. Let's break it down.
What is VWAP?
VWAP stands for Volume Weighted Average Price. Concretely, it's the average price at which an asset has traded since the start of the session, but giving more weight to the moments when many contracts changed hands. The result: a line that represents the "true" average price where activity was strongest, and not just a simple average of candles.
Above = expensive, below = cheap
The basic reading comes down to one sentence. When the price is above the VWAP, it's trading higher than the day's weighted average; when it's below, it's trading lower. That doesn't tell you what to do — it gives you context. Buying "cheap" (below the VWAP) or selling "expensive" (above it) is often considered a better entry quality, all else being equal.
The ±2 / ±3 bands: the extremes
Around the VWAP, standard deviation bands are often drawn (±1, ±2, ±3). They measure how far the price has moved away from its average. The more the price stretches toward an outer band (±2, ±3), the more it's "stretched like a rubber band." These extreme zones are watched for a possible return to the mean — without ever guaranteeing it will happen.
Why it resets every session
The intraday VWAP is recalculated with each new session: it tells the story of the day, not of the week. That's why it's so useful to the short-term trader: it sticks to the current session (Asia, London, New York).
How it's used in the JARVIS METHOD
The VWAP is the centerpiece of our reading. It's used to judge the quality of an entry ("expensive / cheap"), and its extremes feed the idea of a return to the mean. All of this combines with the reading of sessions and moving averages to distinguish a continuation from a simple bounce. The advantage: these are numerical and objective markers, identical for everyone, not hand-drawn zones.
To go further
The useful reflex: keep the definition handy with the bot's /terme vwap command, and see how the VWAP fits together with the 2 textbook cases via /methode. The full logic (entry quality, extremes, sessions) is laid out step by step in the JARVIS METHOD training.
Educational content. Trading involves a risk of capital loss; this is neither investment advice nor tax advice, and past performance does not predict future performance.