Strategy · Day Trading
VWAP PULLBACK TRADE
BullishDefined riskIntermediate
Overview
Enter long when price pulls back to the session VWAP after an opening drive higher, with bid-side delta turning positive on the pullback. Targets a continuation push.
Setup
- 1.Wait for the open to establish a clear directional move (typically first 30-60 minutes).
- 2.Mark session VWAP and the upper standard-deviation bands.
- 3.Watch for a pullback to VWAP with diminishing volume on the dip.
- 4.Enter when delta or absorption turns positive at the VWAP touch.
- 5.Stop just below the VWAP swing low (typically 1-3 points on ES).
- 6.Target the VWAP +1 SD band or prior session high.
Max profit
Distance from entry to upper band; typical 1.5-3R.
Max loss
Stop distance × tick value; size to risk <1% per trade.
Breakeven
Entry price plus commissions.
When to use
On strong-trending days with clear opening direction and orderly pullbacks.
When to avoid
On range days with no opening drive. On news-driven sessions with erratic VWAP behavior.