The VWAP and its reality in the crypto world: my personal experience

What a deal with the VWAP! After years of trading in the markets, I've come to a conclusion about this indicator that few dare to say. The famous Volume Weighted Average Price is not the panacea that they sell us, although it does have its utility when you really know how to use it.

From my trench as a trader, I have seen how many "gurus" present it as the magic solution, but the reality is much more complex. This indicator combines price and volume to give you a picture of the market that, frankly, is sometimes useful and other times can lead you straight to losing your money.

Dubious origins and application in crypto

Kyle Krehbiel introduced it in the 80s, but does it really work the same in cryptocurrencies as in traditional markets? My experience tells me NO. The crypto market is wild, manipulated, and has a volatility that would drive any technical indicator designed for more "civilized" markets crazy.

The VWAP calculates a weighted average price considering accumulated volume and typical price. It sounds nice in theory, but when whales move the market at will, what good is this average to us?

Calculations that few understand

To calculate the VWAP you need the Accumulated Typical Price, the trading volume, and the accumulated volume. The formula seems simple, but many apply it without really understanding what they are measuring.

I have seen traders lose everything by blindly trusting these numbers without considering fundamental factors or the market manipulation that occurs constantly on platforms I will not name to avoid problems.

My strategy: beyond the indicator

When I use VWAP, I never do it alone. The idea that a price above the VWAP indicates a bullish trend is simplistic and dangerous. How many times have we seen artificial pumpings that then crash?

The strategies that have given me the best results combine VWAP with:

• RSI to confirm if we are really in overbought ( although this also fails when the market is manipulated )
• MACD for momentum ( that sometimes also lies blatantly )
• Bollinger Bands for volatility ( another indicator that whales know how to exploit )

The inconvenient truth

What nobody tells you is that the big hands of the market KNOW these indicators and play with them. The VWAP is not immune to this manipulation. I have seen patterns where the price is clearly pushed just above the VWAP to create the illusion of an upward trend, trapping small investors like fish.

The crypto world needs its own tools, not adaptations from traditional markets that operate under different rules.

Should I use VWAP? Yes, but with extreme caution and never as the sole indicator for making decisions. This market requires more cunning than blind faith in lines on a screen.

Trading is not for everyone, and anyone who tells you that a single indicator will lead you to wealth is probably selling smoke. My advice after thousands of trades: learn VWAP, use it wisely, but never forget that in crypto, market psychology and price action are equally or more important.