What is AVL?
AVL is short for Average Value Level.
In short, it is the average price around which trading occurs over a very short period, based on executed buy and sell orders.
Imagine you are looking at a crowded trading arena; AVL gives you a quick view showing you where the real battle between sellers and buyers is concentrated at this moment.
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How does AVL appear to you while trading?
On some platforms like Binance and other modern platforms, AVL appears simply:
• It is displayed as a line or a small number next to the current price.
• It changes instantaneously with every market movement.
• It is calculated based on the average prices of recently executed trades.
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Why is AVL important?
The current price is not always enough to make a buy or sell decision. Sometimes the market shows a false movement (a fake breakout), but AVL reveals the hidden truth behind these movements.
When the current price is above AVL, it indicates that buyers are in control, and the market may be poised for a rise.
If the price is below AVL, it indicates that sellers are exerting downward pressure on the market.
If the price is very close to AVL without a clear separation, it means that the market is in a state of volatility and confusion, and the next movement may be unclear or unreliable.
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How to use AVL wisely while trading?
First, you can use AVL as a tool to confirm trades. Before opening a buy position, ensure that the current price is clearly and stably above AVL. If you are thinking of a sell position, wait until you see the price firmly below AVL.
Secondly, AVL helps you determine the strength of the movement. The larger the difference between the price and AVL, the stronger and more confident the market movement is in its direction. If the difference is very small, it indicates market volatility and weak trend.
Thirdly, you can rely on AVL to filter out false signals from other indicators. If your traditional indicators give you a buy signal, but the price is below AVL, this could be a false signal that requires caution.
Fourthly, by combining AVL with support and resistance levels, your strength as a trader increases. If you see the price breaking resistance and surpassing AVL at the same moment, this is additional confirmation of the validity of the upward trend. If the price breaks support and drops below AVL, this often confirms the start of a new downward wave.
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A simplified practical example:
Let's assume the current price of XRP is 2.2250, while the AVL value is 2.2226.
The difference here is very small, about 0.0024 only. This indicates that the market is hesitant and indecisive, and there is no clear strong movement. In this case, it is better to wait for the price to move away from AVL by a noticeable margin before making any buy or sell decision. When the price starts to move away gradually with the appearance of strong candles, real entry opportunities emerge.
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A light tip for smart traders:
Do not rely on AVL as a standalone main tool. Instead, consider it a momentary mirror of market movement, and use it with your analysis of supports, resistances, and candles to build smarter and stronger trading decisions.
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Conclusion
AVL is not just a passing number next to the price; it is the true heartbeat of the market at its current moment.
Those who master reading AVL become more capable of filtering out daily price noise, turning into more wise and precise traders in determining entry and exit points.
Start today by incorporating AVL into your tools, and you will discover for yourself how small details can make big profits.
