VWAP vs VWMA vs TWAP: what is the difference?
Part 6 of 13 in Charts and indicators
Updated 24 October 2026 · यह गाइड हिन्दी में पढ़ें →
VWAP calculator and indicator →
Three averages with similar names sit side by side in most charting platforms: VWAP, VWMA and TWAP. All three average the price, two of them weight it by volume, and their names differ by a letter or two, so they are easy to mix up. The differences come down to two questions. Does the average count volume? And where does it start counting?
The three at a glance
| VWAP | VWMA | TWAP | |
|---|---|---|---|
| Full name | Volume weighted average price | Volume weighted moving average | Time weighted average price |
| Counts volume | Yes | Yes | No, every candle counts the same |
| Counts from | The first candle of the session | The last few candles, a window that moves along | The first candle of the session |
| Starts again | Every morning | Never; old candles drop out of the window | Every morning |
| Charts it suits | Intraday | Any, from 1-minute to weekly | Intraday |
The formulas
- VWAP = total of (typical price × volume) ÷ total volume, counted from the 9:15 am candle. The typical price of a candle is (high + low + close) ÷ 3.
- VWMA over N candles = total of (close × volume) ÷ total volume, for the last N candles only. Like most moving averages, it uses closes.
- TWAP = the plain average of each candle's price, counted from the session's first candle. Here it uses the typical price, so the only difference from VWAP is the volume. Some platforms use (open + high + low + close) ÷ 4 instead.
Put simply, VWAP is TWAP with volume added, and VWMA is a simple moving average with volume added.
Worked example
These are the same six 15-minute candles of Stock ABC (made-up prices) used in VWAP vs anchored VWAP. The VWMA and the simple moving average (SMA) here use a length of 3 candles, so they begin at the third candle.
| Candle | Close | Typical price | Volume | VWAP | TWAP | VWMA (3) | SMA (3) |
|---|---|---|---|---|---|---|---|
| 9:15 | ₹202 | ₹202 | 30,000 | ₹202.00 | ₹202.00 | – | – |
| 9:30 | ₹197 | ₹199 | 20,000 | ₹200.80 | ₹200.50 | – | – |
| 9:45 | ₹191 | ₹193 | 25,000 | ₹198.20 | ₹198.00 | ₹197.00 | ₹196.67 |
| 10:00 | ₹190 | ₹190 | 40,000 | ₹195.35 | ₹196.00 | ₹191.94 | ₹192.67 |
| 10:15 | ₹196 | ₹194 | 20,000 | ₹195.15 | ₹195.60 | ₹191.71 | ₹192.33 |
| 10:30 | ₹198 | ₹198 | 15,000 | ₹195.43 | ₹196.00 | ₹193.20 | ₹194.67 |
The 10:30 VWMA, step by step: (190 × 40,000 + 196 × 20,000 + 198 × 15,000) ÷ (40,000 + 20,000 + 15,000) = (₹76,00,000 + ₹39,20,000 + ₹29,70,000) ÷ 75,000 = ₹1,44,90,000 ÷ 75,000 = ₹193.20. The SMA of the same three closes is (190 + 196 + 198) ÷ 3 = ₹194.67.
The VWMA sits ₹1.47 below the SMA because the heaviest candle in the window, 40,000 shares at 10:00, also closed lowest, at ₹190. Volume pulls the average towards the prices where most shares changed hands.
VWAP and TWAP differ for the same reason. After six candles TWAP is ₹196.00 and VWAP is ₹195.43. The heaviest candle of the morning, again the 10:00 one, had the lowest typical price, so the volume-weighted figure comes out lower.
One more detail ties this page to the anchored VWAP one. At 10:30 the VWMA's three-candle window covers exactly the candles from 10:00 onwards, the same ones as the VWAP anchored at 10:00 there (₹192.67). The two differ only because VWMA uses closes and VWAP uses typical prices. On the next candle the VWMA drops the 10:00 candle and moves on, while the anchored VWAP keeps counting it.
When each one is used
- VWAP is an intraday yardstick: the average price paid by everyone who traded today. It moves less and less as the day goes on, because each new candle is a smaller share of the day's volume.
- VWMA is a moving average for any chart, daily and weekly included. Some traders put it next to an SMA of the same length. When the VWMA is below the SMA, more of the volume in that window traded at lower prices, and the other way round. You choose the length; 20 candles is a common choice.
- TWAP is mostly a yardstick for large orders. A big buyer, such as an institution, that wants to buy evenly through the day without chasing volume splits the order into equal slices over time and compares its average price with the TWAP. It is less common as a chart line.
Common mistakes
- Calling a VWMA "VWAP". A VWMA on a daily chart never resets, so it is not the day's VWAP, however close the names look.
- Using VWAP on a daily chart. VWAP starts again every session, so on daily candles it means little. For longer charts, use a VWMA or an anchored VWAP.
- Expecting volume lines on an index. NIFTY 50 and other indices are not traded themselves, so they have no volume of their own. VWAP and VWMA need the index futures contract instead. TWAP needs no volume, so it can be drawn on the index itself.
- Reading a cross as a signal. Price crossing any of these lines describes trades that already happened. None of them forecasts the next candle.
Try it yourself
The VWAP calculator works out VWAP and anchored VWAP from candles you type or paste, and draws them on a chart. For the basics, start with what VWAP is.
The risk side
These lines are popular with short-term traders, and short-term trading is hard. SEBI's studies (SEBI study, 2023 and 2025) found that about 9 in 10 individual F&O traders lost money in FY22 and FY25. No average of past prices changes those odds. If you trade, set your stop-loss and position size before you enter, and count the charges.
Questions people ask
- What is the difference between VWAP and VWMA?
- VWAP counts every candle from the start of the session and starts again each morning. VWMA counts only the last few candles, a window that moves along, so it works on any timeframe and never resets.
- Is VWMA better than SMA?
- Neither is better. VWMA gives more weight to candles with more volume; SMA weights every candle the same. When the two differ, it tells you at which prices most of the window’s volume traded.
- What is TWAP in trading?
- TWAP, the time weighted average price, is the plain average of price over a period, with every candle counted the same. Large buyers and sellers use it as a yardstick when they spread an order evenly through the day.
- Which length should I use for VWMA?
- There is no correct length. Short lengths follow price closely and turn often; long ones are smoother and slower. Whatever length you pick, compare it with an SMA of the same length.