How I Use VWAP to Time Entries Like a Pro

VWAP (Volume Weighted Average Price) is the single most important indicator for intraday traders. Here's exactly how I use it every single day to time my entries and exits.

What Is VWAP?

VWAP calculates the average price a stock has traded at throughout the day, weighted by volume. It's the benchmark that institutional traders use. When a stock is above VWAP, buyers are in control. Below VWAP, sellers are winning.

My Three VWAP Setups

1. The VWAP Reclaim

When a stock sells off below VWAP in the morning, then reclaims it with volume — that's my favorite long setup. It means sellers are exhausted and buyers are stepping in at institutional prices. I enter on the reclaim candle and set my stop just below VWAP.

2. The VWAP Rejection

The opposite setup. Stock rallies into VWAP from below but gets rejected. This is a short signal. Institutions are selling into the rally. Enter short on the rejection candle, stop above VWAP.

3. The VWAP Hold

Stock pulls back to VWAP and bounces. This is a continuation signal in a trending stock. Only take this in stocks that are already above all major moving averages. The VWAP touch is your low-risk add point.

Common Mistakes

Don't use VWAP in isolation. Combine it with level 2, time and sales, and the overall market direction. And never trade VWAP setups in the last 30 minutes — the indicator loses its edge near the close.