What is Money Flow & VWAP? How does it help me make investment decisions
A: Money Flow and VWAP (Volume-Weighted Average Price) are powerful analysis tools professional traders systematically use to assist themselves in making sound and well-informed investment decisions.The Money Flow chart shows how much money is moving in or out of a particular
stock, while the VWAP chart shows the average price for a stock in the current or previous market session. To access this function, type in a ticker symbol in the symbol box and click on the "Money Flow & VWAP" button on the ticker-based toolbar.Only trades with prices different from the previous ones are used in calculating Money Flow. For example, if stock XYZ is traded at $50 and a new trade of 100 shares clicks in at $50.125, then an amount of 100 x $50.125 = $5,012.5 is added to the current Money Flow number of XYZ. Naturally, if the price of the new trade is lower than the previous trade, the Money Flow amount is decreased. If stock XYZ's Money Flow chart shows $1.2 million at 10:00 am, you can interpret that about $1.2 million has moved into this stock from the market open (likely, from 9:30 am to 10:00 a.m.).The VWAP is also a performance benchmark for traders. If you bought a stock today at a price lower than the current cumulative VWAP, you bought the stock at a good price (you did better than the average buyer of the stock). On the other hand, if you bought the stock at a price higher than the VWAP, you have overpaid for it relative to other buyers of the day.Before making a trade, professional traders want to get as much information as possible about the actions all the market participants have taken on the stock. Money Flow and VWAP provide traders with revealing market data that show the driving forces underneath the surface. The Money Flow is a powerful indicator of the strength of a rally or sell-out. For example, a rally in price accompanied with a strong positive Money Flow has high strength while a sudden rise in price without a significant positive Money Flow is weakly supported and the price may soon fall back. Before one makes a decision to buy a stock, one should check the Money Flow analysis on Tradetrek and make sure that the Money Flow direction is going into the stock or at least it is not increasingly negative.The VWAP is also a performance benchmark for traders. If you bought a stock today at a price lower than the current cumulative VWAP, you bought the stock at a good price (you did better than the average buyer of the stock). On the other hand, if you bought the stock at a price higher than the VWAP, you have overpaid for it relative to other buyers of the day.Relative value traders and arbitragers often monitor the Money Flow chart and the VWAP chart closely and simultaneously. Both charts should move in tandem in proportions: higher positive Money Flow should drive the price and the VWAP higher, while stronger negative Money Flow should push the price and the VWAP lower. In case one sees a significant drop in VWAP accompanied by sizable positive Money Flow, one could expect that the price will quickly recover and it is a golden short term buying opportunity. The opposite is also true.Tradetrek's 30-Day Daily Money Flow & VWAP Charts give you the opportunity to gain insight about the volatility of a stock. By reviewing these powerful trend indicators at a month's glance you will be able to formulate more calculated investment देसिसिओंस
stock, while the VWAP chart shows the average price for a stock in the current or previous market session. To access this function, type in a ticker symbol in the symbol box and click on the "Money Flow & VWAP" button on the ticker-based toolbar.Only trades with prices different from the previous ones are used in calculating Money Flow. For example, if stock XYZ is traded at $50 and a new trade of 100 shares clicks in at $50.125, then an amount of 100 x $50.125 = $5,012.5 is added to the current Money Flow number of XYZ. Naturally, if the price of the new trade is lower than the previous trade, the Money Flow amount is decreased. If stock XYZ's Money Flow chart shows $1.2 million at 10:00 am, you can interpret that about $1.2 million has moved into this stock from the market open (likely, from 9:30 am to 10:00 a.m.).The VWAP is also a performance benchmark for traders. If you bought a stock today at a price lower than the current cumulative VWAP, you bought the stock at a good price (you did better than the average buyer of the stock). On the other hand, if you bought the stock at a price higher than the VWAP, you have overpaid for it relative to other buyers of the day.Before making a trade, professional traders want to get as much information as possible about the actions all the market participants have taken on the stock. Money Flow and VWAP provide traders with revealing market data that show the driving forces underneath the surface. The Money Flow is a powerful indicator of the strength of a rally or sell-out. For example, a rally in price accompanied with a strong positive Money Flow has high strength while a sudden rise in price without a significant positive Money Flow is weakly supported and the price may soon fall back. Before one makes a decision to buy a stock, one should check the Money Flow analysis on Tradetrek and make sure that the Money Flow direction is going into the stock or at least it is not increasingly negative.The VWAP is also a performance benchmark for traders. If you bought a stock today at a price lower than the current cumulative VWAP, you bought the stock at a good price (you did better than the average buyer of the stock). On the other hand, if you bought the stock at a price higher than the VWAP, you have overpaid for it relative to other buyers of the day.Relative value traders and arbitragers often monitor the Money Flow chart and the VWAP chart closely and simultaneously. Both charts should move in tandem in proportions: higher positive Money Flow should drive the price and the VWAP higher, while stronger negative Money Flow should push the price and the VWAP lower. In case one sees a significant drop in VWAP accompanied by sizable positive Money Flow, one could expect that the price will quickly recover and it is a golden short term buying opportunity. The opposite is also true.Tradetrek's 30-Day Daily Money Flow & VWAP Charts give you the opportunity to gain insight about the volatility of a stock. By reviewing these powerful trend indicators at a month's glance you will be able to formulate more calculated investment देसिसिओंसेरेत्ail & Block Money Flow charts provide a breakdown of Institutional trades versus Retail trades. These individual charts will give a more accurate representation of the general direction of a stock. The Block Money Flow chart displays the Money Flow for Institutional Block Trades (10,000 shares or more and/or a minimum of $200,000/trade) only. The Retail Money Flow chart is generated by calculation on the smaller trades that are usually made by retail market, or smaller investors. The Total Money Flow is simply the addition of Retail and Block Money Flow plotted on one chart.The Historical Money Flow & VWAP tool makes the interday level trading data of past month available at the click of a button. By entering a trading day that has occurred with in the past month, from today's date, you can bring up the daily Money Flow & VWAP charts. This allows you to research a specific date in the recent history for any stock.Money Flow & VWAP information is available to Silver or Gold Package subscribers only. For Gold Package subscribers, the information displayed is in real-time, while Silver Package subscribers get the results with a 15 to 20 minute delay. To sign up for the Silver or Gold Packages, please
