Volume Profile vs Anchored VWAP
Volume profile draws a histogram of how much traded at each price over a window. Anchored VWAP averages price weighted by volume from a chosen event, so pointed at the same starting point one gives a distribution and the other its centre of gravity.
Both can be measured from the same starting point. One returns a single number and the other returns the distribution that number averages, which makes them complements rather than rivals.
What each one is
Volume profile draws a histogram of how much traded at each price over a chosen window. Volume profile covers it.
Anchored VWAP averages price weighted by volume from a chosen event — a results release, a gap, a swing extreme. Anchored VWAP covers it.
Pointed at the same anchor they describe one thing. The average is the profile’s centre of gravity, which means the two together are a summary and its detail.
Where they differ
How much survives. A profile shows peaks, gaps and shape. An average reports one number and everything about the shape is lost.
What a two-peaked window does. The profile shows both busy areas. The average sits between them, describing a price where comparatively little traded.
How each is read. A profile for its peak and its value band; the anchored average as a level price is above or below.
Whether other people share it. Neither is standardised, since both depend on where you started them — which is a difference from the session-reset version of the average.
Where they agree
Both depend on where you start them. The anchor and the profile window are the same kind of choice, and both can be moved after seeing what happened.
Both depend entirely on the volume feed. On a fragmented market or a spot pair the reported figure covers part of the trading, so both are partial in the same way.
Both describe the past. Neither contains a statement about what happens next.
And neither supplies a stop. On this site’s shared series the ninetieth percentile bar range is 1.101, and a stop belongs at structure rather than at a summary.
Which one to use
Use the anchored average when you want one number since an event. The average price paid since a results release is a clean, single fact you can act around.
Use the profile when the shape matters. A window with two distinct areas of activity is a completely different picture from one balanced area, and only the profile distinguishes them.
Use both from the same anchor. That is the strongest arrangement — the line for the quick read and the distribution when you want to know what is behind it.
And when the anchor was chosen because the line looked right, use neither. That is fitting, and it applies equally to both tools.
Why the anchor is the shared weakness
Because moving it changes everything. Two anchors a few bars apart produce a different line and a different profile, and nothing on the chart records which was chosen first.
And because the choice is invisible afterwards. A published session reset can be checked by anybody; a private anchor cannot, so the discipline is entirely yours.
What makes an anchor defensible
It marks an event, not a price. A release, a gap, a policy decision — something that happened rather than a level you liked the look of.
It was chosen before you saw what followed. Anchoring after the reaction is describing history and calling it analysis.
It is written down. Which event, on which date, so the same rule can be applied next time.
And it is not moved. An anchor adjusted after a losing trade is a parameter fitted to the past, and the fitting leaves no trace.
What to check before using either
The volume feed. Both weight by it, so a partial figure produces a confident reading of a fraction of the market.
The anchor, written down. Same rule for both tools, decided before the outcome is visible.
What the reading means to you. Above or below the average, at the peak or outside the band — each is a different rule with its own trade count.
And the stop. Neither provides one, and on this site’s shared series the largest single bar range was 2.338.
The original data
Of the 24,971 unique videos in research/search-study-corpus.jsonl, no title compares these two
directly — this pair is constructed from two subjects the corpus covers separately. Separately, volume
profile appears in 227 titles at a median of 12,984 across 109 channels, and anchored VWAP in 29 at a
median of 14,972 across 26. The counts come from site/corpus_count.py.
227 videos on one at 12,984 and 29 on the other at 14,972. Eight times the coverage and a similar audience per video — the anchored average is barely taught and holds its interest per upload, which is the profile of an under-served subject.
The answer to the question on that chart is that the average is in an empty middle. Very little traded at that price since the anchor — so treating it as a level participants transacted at is exactly backwards.
When it fails
The failure is trading the anchored average as a level when the distribution is two-sided. Price returns to the line, which reads as the average price paid since the event, so a position is taken expecting a reaction. The profile shows the average sitting between two busy areas with a hollow middle — almost nothing traded there, so there are no resting orders and no reason for price to pause.
The second failure is moving the anchor until it fits. That leaves no evidence.
A third is using either on a partial volume feed. The input is a fraction.
A fourth is comparing profiles across different windows. The shapes are not comparable.
A fifth is treating either as a forecast. Both summarise the past.
And a sixth is stopping at an average. The largest bar range here was 2.338.
Related
Volume profile covers the full distribution. Anchored VWAP covers the average from a chosen event. And VWAP covers the scheduled version everybody shares.
Anchor both to the same event and you have the average price paid since then and the full picture of where that trading happened. The average is the summary; the profile is what it summarises, and the two together are more useful than either.
— Michael Whitman
This page is educational, not financial advice. Test every idea on your own charts before risking money.