VWAP (Volume Weighted Average Price) aims to match the market’s average volume profile.
Because many participants use VWAP, the algorithm’s execution pattern becomes a self‑fulfilling shape: buying early in the day when volume is high, selling later.
Nang notes that VWAP execution can be anticipated and exploited by other traders who detect the “liquidity curve”.
Understanding VWAP behavior helps explain why price often drifts toward the VWAP during the day.
“The main algorithm that people use is called VWAP, volume weighted average price, right? And these VWAP algorithms have like you can know how they work.” — Rishi Nang