VWAP Quick Reclaim Scalping

Price had been holding above a single line all session. Then it slipped below for two candles, and it looked like the buyers were done. Seconds later it snapped back above that line on a burst of volume, and the uptrend resumed as if nothing had happened. The traders who understood that line were ready. The rest were shaken out.

That line is the VWAP, and this is the VWAP Quick Reclaim Scalp. It trades the fast recovery of a key intraday level in a trending session.

The Setup

VWAP stands for Volume Weighted Average Price. It is the average price of a stock across the day, weighted by the volume traded at each price.

Because it reflects where most of the day's actual business was done, large institutional traders use it as a benchmark for fair value. That is why price so often respects it.

On your chart it appears as a single line that resets each morning.

In a trending session, price sometimes loses VWAP briefly then reclaims it fast. That quick reclaim is the signal.

It tells you the dip below was a shakeout, not a genuine shift, and the trend is reasserting. You treat the reclaim as a momentum trigger.

Entry (long): wait for two closes back above VWAP after the brief loss, then enter on the first retest that holds, meaning price dips toward VWAP again but does not close below it.

Stop: below the low of the reclaim.

Exit: a quick fixed target, or leave immediately if price closes back below VWAP, because the reclaim has failed.

The Analogy

Think of a kabaddi raider who has crossed the centre line into the opponents' half. Everything now depends on how fast he gets back. Touch a defender and return across that line quickly and the raid counts. Linger on the wrong side and the defenders close in and he is out. VWAP is that centre line. A quick reclaim is the raider stepping back across in time. Stay below too long and the chance is gone.

A Worked Example

This example uses: entry ₹500, account capital ₹5,00,000, 1% risk per trade (₹5,000). The stop distance varies by setup.

In a trending session, price briefly loses VWAP, which sits around ₹499, then posts two closes back above it.

Common Mistakes

Mistake 1: Entering on the first tick back above VWAP

A single candle poking above VWAP is not a reclaim. The setup asks for two closes back above, then a retest that holds. Jumping in on the first tick means getting caught in the chop that often surrounds the line.

Mistake 2: Ignoring the fail-safe exit

If price closes back below VWAP after your entry, the reclaim has failed and the reason for the trade is gone. Holding past that point is how a small planned loss becomes a larger one. Leave immediately.

Key Takeaways

• VWAP is the volume-weighted average price of the session, a fair-value benchmark that institutions watch, which is why price respects it.
  
• The setup trades a brief loss of VWAP followed by a fast reclaim: two closes back above, then entry on the first retest that holds.
  
• Stop goes below the reclaim low. Exit at a quick fixed target, or immediately if price closes back below VWAP.
  

Assignment

1. Add VWAP to a 1 or 3-minute chart of a liquid stock or index on a trending day.
   
2. Find one instance where price lost VWAP and reclaimed it with two closes back above.
   

Did a retest hold? How far did price travel after the reclaim before stalling?

Note also any instance where the reclaim failed and price closed back below, and see how quickly the fail-safe exit would have protected you.

That completes the trend-based module. Next we turn to the opposite idea. In the Mean Reversion module, we stop following the trend and start fading exhaustion, beginning with the RSI Exhaustion Reversion Scalp.