Anchored VWAP (AVWAP) differs from traditional daily VWAP by letting traders measure average price from a specific event—like an earnings report or a precise intraday high. For example, when a stock spikes at 10:38 AM and begins to fade, anchoring to that peak can reveal hidden resistance. If the price spikes again later, say around 11:04 AM, it may touch that anchored VWAP and stall—offering a low-risk short entry with a stop just above that lower high. This strategy is especially useful for managing risk during parabolic pullbacks in small-cap stocks.
