VWAP (Volume Weighted Average Price) is one of the most powerful tools in futures trading, especially for identifying high-probability retracement entries in strong trends.
In an uptrend, price often moves impulsively away from VWAP and then retraces back toward the VWAP area, where institutional buyers step in. This VWAP retracement acts as dynamic support, offering a low-risk continuation trade in the direction of the trend.
The same concept applies in a downtrend, where VWAP acts as dynamic resistance. Price pulls back toward VWAP, sellers re-enter, and the trend continues lower.
How to Trade a VWAP Retracement Strategy:
Identify a clear intraday trend (higher highs / higher lows or lower highs / lower lows)
Wait for price to pull back toward VWAP
Look for rejection or momentum confirmation near VWAP
Enter in the direction of the main trend
Place stops beyond the VWAP zone and target trend continuation
This VWAP futures strategy is widely used by institutions and professional traders because it combines trend direction, volume, and mean reversion into one simple framework.
Perfect for NQ, MNQ, ES, MES and other futures markets.
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