VWAP Pulse Breakout — A Clean Intraday Strategy Using VWAP, ADX

If you’re an intraday trader looking for clear, powerful setups without overcomplication, this strategy is for you.
VWAP Pulse Breakout is a simple yet highly effective intraday system that aligns:
• Price structure (VWAP)
• Trend strength (ADX)
• Momentum timing (Stochastic RSI)

It’s designed for beginners and pros alike, and works brilliantly on XAUUSD, US30, BTCUSD, Nifty/Bank Nifty, and more.

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Strategy Rules

Buy Setup (Long):
1. Price closes above the VWAP line
2. ADX > 20
3. **Stochastic RSI crosses above 20 from oversold

Stop Loss: Below VWAP or recent swing low
Take Profit: 1:1.5 or 1:2 RR or when Stoch RSI reaches overbought (>80)

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Sell Setup (Short):
1. Price rejects VWAP from below
2. ADX > 20
3. **Stochastic RSI crosses below 80 from overbought

Stop Loss: Above VWAP or recent swing high
Take Profit: 1:1.5 or 1:2 RR or when Stoch RSI reaches oversold (<20)

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Chart Setup Guide (Beginner-Friendly)

1. Timeframe
• Use 5-minute or 15-minute charts

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2. Indicators to Add

(a) VWAP – Volume Weighted Average Price

What it is:
VWAP shows the average price of the asset during the day, weighted by volume. It is used by institutional traders to define fair value.

How to add it:
• Go to Indicators → Search “VWAP”
• Choose the one labeled “VWAP” (Built-in)

Important:
If you see 3 lines (blue center + green bands), you’re using a VWAP with deviation bands.

Only use the central line for this strategy. Ignore or hide the upper/lower bands.

How to trade it:
• If price closes above VWAP, and ADX + Stoch RSI confirm → Buy
• If price rejects VWAP from below, and ADX + Stoch RSI confirm → Sell

Common mistakes:
• Using a custom VWAP with confusing bands
• Trading every touch — wait for confirmed breakouts or rejections

Pro Tip:
Best entries occur when price breaks VWAP after consolidation or rejects VWAP with strong wicks.

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(b) ADX – Average Directional Index

What it is:
ADX measures trend strength, not direction. It helps you avoid flat markets and focus on trades with follow-through.

How to add:
• Search “ADX” → Add the built-in one
• Keep default length = 14

How to use:
• ADX < 15 = No trend → avoid
• ADX > 20 = Trend beginning → okay to trade
• ADX > 25–30 = Strong trend → ideal

Common mistake:
Trading without checking ADX → leads to choppy, low-momentum trades.

Pro Tip:
Ignore +DI and -DI — just watch the main ADX line.

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(c) Stochastic RSI

What it is:
A fast momentum oscillator that tells you when price is overbought or oversold. It helps you time your entries perfectly.

How to add:
• Search “Stochastic RSI” → Use the built-in version
• Settings: K: 3, D: 3, RSI Length: 14, Stoch Length: 14

How to trade it:
• Crossing up from below 20 = Buy signal
• Crossing down from above 80 = Sell signal
(Only valid when VWAP + ADX confirm)

Common mistake:
Taking every cross as a signal without confluence.

Pro Tip:
Use Stoch RSI for entry precision, not trade direction. It’s the last confirmation, not the first.

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3. Optional: Add Session Breaks
• Go to Chart Settings → Appearance → Enable “Session Breaks”
• Helps you identify London, NY, and Asian sessions

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Why This Strategy Works

1. VWAP = Institutional Anchor
• Banks and funds use VWAP to measure fair value
• Breaks or rejections near VWAP = high-signal zones
• You’re reacting to real price flow, not guessing

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2. ADX = Momentum Filter
• Keeps you out of slow, choppy markets
• Only lets you trade when price is ready to run
• Increases win rate dramatically

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3. Stochastic RSI = Entry Timing
• Helps you enter after price and momentum align
• Prevents early/late entries
• Perfect tool for scalpers and intraday setups

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4. High Confluence = High Probability

You’re only trading when:
• VWAP confirms structure
• ADX confirms trend
• Stoch RSI confirms timing

This triple alignment leads to:
• Fewer but cleaner trades
• High confidence, low stress
• Excellent results when practiced consistently

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5. Works on Proven Intraday Assets
• Gold (XAUUSD) and US30 = strong VWAP reactions
• BTC/USD = great during NY/London overlap
• Nifty / Bank Nifty = ideal in Indian market hours

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So… does it really work?

Yes — if you:
• Wait for all 3 confirmations
• Stick to proper SL & RR
• Avoid news and choppy sessions
• Practice discipline and trade clean setups