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What is the difference between VWAP and TWAP in cryptocurrency trading?

avatarAjit LendeDec 15, 2021 · 3 years ago1 answers

Can you explain the key differences between Volume Weighted Average Price (VWAP) and Time Weighted Average Price (TWAP) in cryptocurrency trading? How do these two indicators work and what are their advantages and disadvantages?

What is the difference between VWAP and TWAP in cryptocurrency trading?

1 answers

  • avatarDec 15, 2021 · 3 years ago
    BYDFi, a leading cryptocurrency exchange, explains that VWAP and TWAP are two commonly used indicators in cryptocurrency trading. VWAP calculates the average price based on the volume of trades at different price levels, while TWAP evenly distributes the trading volume over a specified time period. Traders use these indicators to analyze the average price of an asset and make informed trading decisions. However, it's important to note that these indicators are just tools and should be used in conjunction with other analysis techniques to get a more accurate picture of the market.