VWAP Pullback
VWAP Pullback is an pullback strategy that buys a shallow dip back toward VWAP inside an established uptrend, rather than chasing a breakout.
VWAP Pullback is an pullback strategy that buys a shallow dip back toward VWAP inside an established uptrend, rather than chasing a breakout. VWAP (Volume-Weighted Average Price) is the level institutions benchmark intraday fills against, so a pullback to it in an up-trending, liquid name is a common high-probability re-entry point. The trade exits when price loses VWAP.
It is an easy, pullback strategy for 5M–30M intraday timeframes on liquid stocks.
How it trades
| Ingredient | Meaning |
|---|---|
| VWAP() | Volume-weighted average price — the "fair value" line price is pulling back to |
| RSI(14) | Momentum; < 40 marks the short-term pullback (oversold-ish) |
| ATR(14) | Volatility; VWAP() + ATR(14) bounds "close to VWAP, not extended above it" |
Buy (pullback to VWAP in an uptrend):
Close > VWAP() AND RSI(14) < 40 AND Close <= VWAP() + ATR(14)
Sell (loses VWAP):
Close < VWAP()
The three buy conditions together describe a specific setup: price is above VWAP (uptrend intact), has pulled back (RSI dipped under 40), and is sitting within one ATR of VWAP (a shallow dip to the line, not an extended runner). Requiring all three is what keeps it a "pullback-to-support" entry rather than a breakout or a falling-knife catch.
When it works best
High-probability in trending sessions: when a liquid name is trending up intraday and repeatedly pulls back to VWAP, this buys those dips with momentum and volatility confirmation. It is weak in range-bound or choppy markets, where price oscillates around VWAP with no durable trend and the "pullback" is just noise — RSI dips and VWAP losses whipsaw the position.
Backtest this strategy yourself
Build these rules on the Free plan, adjust them, and see how they would have traded.