VWAP and Zones as a Trading System

Lessons in this module

1. 8.1

   VWAP bands and distance in sigmas (Z)

   Read VWAP not as a line but as a corridor: where price is expensive relative to the average and how far it has traveled, and know what history showed: a rejection from a band returns to VWAP no more often than chance, and the position in sigmas gives only a weak return to the mean, 2-4 pp

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2. 8.2

   Rolling VWAP and volatility as a regime switch

   Understand when an anchored VWAP loses its meaning and switch the regime by volatility rather than by hand

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3. 8.3

   Supply and demand zones from pivots

   Build zones from extremes relative to the average price and tell them apart from SMC order blocks

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4. 8.4

   Merging neighboring zones and their life cycle

   Keep the chart from turning into a mess: merge overlapping zones, count touches and remove spent zones in time

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5. 8.5

   Polarity flip: retest, flip and breakout strength

   Tell a real breakout that flips the zone apart from a false one: volume, momentum and distance from the average

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6. 8.6

   Period-close VWAP and price-VWAP divergence

   Use the daily, weekly and monthly VWAP closes as levels of their own and see price diverging from the average

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7. 8.7

   Outcome frequencies: the probability cone and a scenario plan

   Count what happened next from a similar market state and turn it into an A/B/C plan instead of a single “signal”

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