Overview
VWAP acts as a fair-value anchor for the session. Traders take reclaims and rejections of it, treating the level as the line between buyers and sellers in control.
How it works
When price reclaims VWAP on volume, long setups are favoured; when it rejects, short setups are. The level itself becomes the invalidation point.
Typical setup
- Price approaching VWAP after a trend leg
- Reaction candle at the level with volume
- Entry on confirmation, stop on the other side of VWAP
Advantages
- Objective intraday reference
- Used by institutional flow
- Pairs with any entry trigger
Risks
- Chop around the level produces repeated stops
- Less useful in very thin names
Common mistakes
- Treating VWAP as a guaranteed support
- Using it on daily charts where it resets
Risk management notes
Because price can oscillate across VWAP, limit the number of attempts per session.
This guide is educational. It is not a signal service, a recommendation, or a claim that this strategy is profitable. Trading involves substantial risk of loss.