VWAP Bounce

The VWAP Bounce strategy capitalizes on price rejections at the volume-weighted average price, a key reference level that reflects the true average cost of accumulated volume throughout the day. When price pulls back to touch or briefly breach VWAP during intraday moves, it often attracts institutional buying or selling, causing the price to reverse sharply in the original trend direction.

On the NSE, this setup is particularly relevant because the market exhibits strong directional bias during the morning and late afternoon sessions when liquidity clusters significantly. VWAP becomes a natural gathering point for both retail and institutional traders managing positions. The strategy works best in equity intraday and futures segments where sufficient volume and volatility allow clear bounces to form.

The setup typically triggers after an established trend develops away from VWAP. As price returns to test the level, a trader enters when confluence signals appear—such as candlestick rejections, volume changes, or minor support forming at VWAP itself. The strategy assumes that price finds short-term support or resistance at this dynamically calculated level, offering a lower-risk entry for continuation trades within the daily timeframe.

This Intermediate strategy suits Swing & Positional Traders comfortable with a Daily timeframe and holding periods around Intraday. It's built for the Equity Intraday, Futures segment on NSE, so it fits traders who can check positions without needing intraday execution speed.