A VWAP Cross is a trading strategy that involves buying or selling a stock when its price crosses above or below the volume-weighted average price (VWAP) of the stock. The VWAP is a measure of the average price of a stock based on the volume traded during a specific time period, and is used as a benchmark to determine whether a stock is trading at a fair price.Traders who use a VWAP cross strategy will buy a stock when its price crosses above the VWAP, as this is seen as a bullish signal and an indication that the stock is likely to continue to rise in value. Conversely, traders will sell the stock when its price crosses below the VWAP, as this is seen as a bearish signal and an indication that the stock may continue to decline in value.The VWAP cross strategy is often used by institutional traders, as well as algorithmic traders who use automated systems to execute trades based on predetermined criteria. This strategy can be used for both intraday and longer-term trading, and can be applied to individual stocks, as well as to broader indices or other financial instruments.In conclusion, a VWAP cross is a trading strategy that involves buying or selling a stock when its price crosses above or below its volume-weighted average price. This strategy is based on the assumption that the stock is likely to continue to move in the same direction as the VWAP cross, and is often used by institutional and algorithmic traders.
