Anchored VWAP Breakout

Anchored VWAP is a favourite of professional traders: instead of averaging price from an arbitrary session start (plain VWAP), it anchors the volume-weighted average price to a significant event - a major low, an earnings gap, the start of a move - and tracks the average price paid by every participant since that event. Price above the anchored VWAP means the average buyer since the event is in profit and (institutionally) motivated to defend the level; below it, trapped supply weighs on every rally. This strategy holds a long while Close is above the AVWAP and exits when Close falls back below it.

Anchored VWAP Breakout is an institutional trend-following strategy that anchors VWAP to a significant market low instead of the start of a trading session. It buys when price moves above the Anchored VWAP, indicating that the average buyer since the anchor is in profit, and exits when price falls back below the Anchored VWAP, signaling weakening trend strength. It works best on strong trending stocks where institutions are actively accumulating positions.

It is a hard, trending, intraday/daily institutional-trend strategy.

How it trades

Buy (average buyer since the event is in profit):

Close > ANCHOREDVWAP()

Sell (price loses the anchored level):

Close < ANCHOREDVWAP()

When it works best

An institutional-trend tool: strongest on liquid, heavily-owned names where the AVWAP from a major low genuinely represents the market's average cost basis, making it a defended level on pullbacks. Its documented difficulty is the anchor itself - an auto-selected low is a reasonable default, but an anchor at the "wrong" event (a minor low, a stale low about to be undercut) produces a level nobody is actually defending, and each re-anchor resets the line.