Anchored VWAP: starting the clock at an event

[Shadow Trader]

Standard VWAP resets at a fixed time. Anchored VWAP starts at a point chosen by the trader, such as a news release, a swing low, or the session's first impulsive candle. The line then shows the average price paid since that event, weighted by volume.

The idea is that participants who entered around the anchor point have a cost basis near that line. When price returns to it, they might defend or exit, creating reactions.

For scalpers, useful anchors include the start of a London move, the candle that followed a major release, or the high and low of the Asian session. The line then acts as a dynamic reference that adapts to the day's story.

Caution: choosing the anchor after the fact is easy, and hindsight makes every line look brilliant. The only honest test is to define anchor rules in advance, such as always anchoring at the first five-minute candle after the London open, and then check results without cherry-picking.

Are anchored lines used with fixed rules, or placed by eye?