Auction Market Theory + Anchored VWAP + Failed Auction - The Complete Framework

Most traders look at indicators. Professionals study the auction.
Image 1 breaks down Auction Market Theory. Markets rotate between balance and imbalance. Balance is acceptance, rotation, fair value discovery. Imbalance is aggression, when market orders overwhelm passive liquidity and price expands with conviction. Nearly 70 to 80 percent of the time price is in balance. Expansion only happens after compression. The longer the balance, the more violent the move when value shifts
Image 2 shows how Anchored VWAP fits into that auction logic. Instead of guessing support or resistance, you anchor to a key event such as a swing high, swing low, breakout, or high impact news. From that moment, VWAP tracks the true average price paid by participants. Above it, buyers control. Below it, sellers control. It becomes a dynamic line in the sand that reveals who is defending positioning.
Image 3 ties it together with the failed auction concept. When price pushes outside of value but cannot gain acceptance, that is rejection. Lack of volume follow through, inability to hold above value high or below value low, and sharp re entry into prior balance signal exhaustion. Failed auctions often lead to aggressive moves in the opposite direction
AMT explains the behavior. Anchored VWAP identifies control. Failed auctions signal opportunity.
This is not about indicators. It is about understanding how the auction truly works.
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