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VWAP, short for volume-weighted average price, is a standard tool in stocks and futures. In spot FX there's no central volume, so MT5's VWAP uses tick volume. It still has uses, with limits.

What it represents in FX: the average price weighted by the number of price updates, from a chosen start time, for example the London open.

Possible uses:

• A reference for the session's fair value: price above VWAP suggests buyers have been in control since the open.
• A level for pullback entries on trend days.
• A filter: longs only above VWAP, shorts only below.

Limits:

• Different brokers give different tick volume, so VWAP differs slightly.
• On quiet days, VWAP is close to price and not informative.

A test: compare pullback entries at VWAP with entries at a simple moving average of similar length. If results are the same, VWAP adds nothing for you.

Session start time choice also matters: a VWAP anchored at 08:00 London gives a different picture from one anchored at midnight.

Does anyone use VWAP on FX?