What strategies can be employed using VWAP for day trading in the digital currency space?

3 answers

• Dec 19, 2021 · 3 years ago
  One strategy that can be employed using VWAP for day trading in the digital currency space is to use it as a benchmark for determining the fair value of a particular cryptocurrency. By comparing the current price of a cryptocurrency to its VWAP, traders can identify whether the asset is overvalued or undervalued, and make informed trading decisions accordingly. This strategy can help traders take advantage of price discrepancies and potentially generate profits.
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• Dec 19, 2021 · 3 years ago
  Another strategy is to use VWAP as a dynamic support and resistance level. Traders can monitor the VWAP line throughout the day and look for price action around it. If the price consistently bounces off the VWAP line, it can be considered a strong support level. On the other hand, if the price consistently fails to break above the VWAP line, it can be seen as a resistance level. This strategy can help traders identify potential entry and exit points for their trades.
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• Dec 19, 2021 · 3 years ago
  At BYDFi, we recommend using VWAP in conjunction with other technical indicators, such as moving averages and trend lines, to confirm trading signals. VWAP can provide valuable insights into the overall market sentiment and help traders gauge the strength of a trend. By combining VWAP with other indicators, traders can increase the accuracy of their trading decisions and improve their chances of success.
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