The volume weighted average price (VWAP) is a trading benchmark used by traders that gives the average price a stock has traded throughout the day, based on both volume and price. It is important because it provides traders with insight into both the trend and value of a security. The Formula for the Volume Weighted Average Price (VWAP) is pretty simple. You add up the dollars traded for every transaction (so, the price multiplied by the number of shares traded) and then divide by the total shares traded. On a chart, VWAP and a moving average may look similar. These two indicators are calculating different things. VWAP is calculating the sum of price multiplied by volume, divided by total volume, while a simple moving average is calculated by summing up closing prices over a certain period (say 20), and then dividing it by how many periods there are (20). Volume is not factored in. The volume weighted average price (VWAP) appears as a single line on intraday charts (1 minute, 15 ...