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Strategy · Mean reversion · NAS100 · M5

VWAP Magnet

On a sideways day, price often returns to its average.

VWAP (volume-weighted average price) is the average price institutions measure their execution against. On days without a trend, price keeps returning to it like a magnet.

This strategy only trades those sideways days: when price stretches to the outer band and gets rejected, it bets on the return to the average.

When it works

On sideways days when price crosses the VWAP several times. Never on news days or strong trend days, when price can ride the band for hours.

The setup

A sideways day, with price crossing the VWAP again and again.

Common mistakes

  • Fading the bands on a trending day.
  • Entering without a rejection candle.
  • Holding past the VWAP hoping for more.
Type
Mean reversion
Market
NAS100
Timeframe
M5
Session
New York, on sideways days only (price crossing the VWAP several times). No trading on news days.

General educational rules, not a recommendation to trade any market at any given time.

Entry, stop and target rules

The exact entry condition, stop, target and backtest are in the Playbook, included in the Arrow and Target plans.

See the plansSee the free strategy in full

The other strategies

  • Opening Range Breakout
  • Squeeze
  • London-New York Overlap
  • Liquidity Hunt
  • Mean Reversion
  • Fair Value Gap
  • Weekly Zone

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