What Is the VWAP Bounce Strategy

Six presses on the line

The VWAP bounce strategy is built on one line and one kind of bar. The line is VWAP, the day's volume-weighted average price: the average of every price paid since midnight, counting each price by how much traded at it. The bar is one that dips under the line and closes back above it. Take the Nasdaq on 16 December 2025. From 18:15 to 18:40 six five-minute bars in a row dipped under the line, by between 3.72 and 17.21 points, and every one of them closed above it. A dip to the line and a close back above it is the bounce, and it is what the strategy watches for.

A trampoline

Picture a trampoline. The mat is VWAP, and the price comes down to it, presses it, and springs back. The press is the bar's low, a few points under the line; the spring is the bar's close, back above it. That pair is the bounce. The strategy watches a price that has been above the line for a while, waits for it to come down and press the mat, and reads the close to see whether it sprang back. A price that lies down on the mat, closing under it, is a different thing. The strategy's card says what it does then, and this paper only shows the press and the spring.

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