The RSI + VWAP strategy for day trading is one of the strongest methods for determining entry and exit points, as it combines the strength of momentum (RSI) and the true price direction strength of institutions (VWAP).
This is a summary of the method in simple and clear steps:
🟩 Buy Trade (Long)
🔸 Entry:
When the price is below VWAP and then breaks upward with a clear increase in momentum, coinciding with RSI above level 60… this is where buying strength starts to enter.
🔸 Stop Loss:
Below the last nearby low or directly below the VWAP line.
🔸 Exit:
When the price starts to deviate excessively from VWAP and RSI reaches exhaustion areas near 60–70.
🟥 Sell Trade (Short)
🔸 Entry:
When the price is above VWAP and then breaks downward and momentum starts to weaken, coinciding with RSI falling below level 40… a strong entry signal for short.
🔸 Stop Loss:
Above the last peak or directly above the VWAP line.
🔸 Exit:
When the price moves too far away from VWAP and RSI reaches oversold areas near 40–30.
Why is the strategy strong?
Because VWAP reveals to you the fair market price that institutions rely on.
And RSI reveals the strength of momentum and trend changes.
By combining both, you get precise entry and smart exit without guessing.
Suitable for day traders on small timeframes (1–5 minutes), and for advanced traders who aim to enter when institutions move, not during random noise.
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