easy · Order Flow Analysis market-mechanics-execution
What is the primary limitation of using VWAP as a standalone signal in the final hour of the trading session?
- The VWAP calculation resets at the start of the 'Power Hour'.
- Institutions switch to using 'Opening Range' instead of VWAP after 3:00 PM.
- The massive volume accumulated during the day makes VWAP extremely laggy and slow to respond to late-day price shifts.
- VWAP only calculates data from the first four hours of the session.
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