For swing trading, the standard daily-resetting VWAP is too short-lived to be useful, so traders use the Anchored VWAP (AVWAP) instead. You anchor the calculation to a significant event such as an earnings report, a major swing high or low, a breakout candle, or a central-bank announcement, and it tracks the volume-weighted average price from that point forward.
Price holding above the AVWAP signals an uptrend where the line acts as dynamic support; price below it suggests a downtrend where it acts as resistance.
Swing traders wait for pullbacks toward the AVWAP after a trending move, then enter on rejection or a decisive break, confirmed by volume. Because institutions benchmark execution against VWAP, these levels often mark where smart money defends positions.