VWAP
Stowe's Playbook: VWAP Deep Dive Part 1
Sep 24, 2025
An Introduction to Stowe's Intraday Trading Process
Overview
In this lesson, we’ll break down how I use VWAP slope and its standard deviation bands to identify trends, trend reversals, and balance/imbalance shifts. We’ll also explore how stacking monthly, weekly, and daily VWAPs provides context for broader market narratives.
This isn’t a high-timeframe swing strategy—it’s a way to keep larger context in the back of your mind while making intraday decisions.
⚠️ Important: Everything here is hindsight. Like any trade idea, this will fail often. My goal is to show both when it works and when it doesn’t, so you see the full picture.
VWAP Slope & Bands
How I Use VWAP Intraday
VWAP itself is just the mean of traded price weighted by volume.
Standard deviation bands (+1, +2, –1, –2) give me balance zones.
Within ±1 SD = balance
Outside ±1 = imbalance (buyers/sellers pushing extremes).
I generally ignore VWAP until 15–30 minutes after RTH open, when enough volume has developed. Until then, I may use previous session data for a roadmap.
Playbook Setup: Opening Drive Reversal
One of my bread-and-butter setups looks like this:
Opening drive in one direction.
Sharp reversal into the opposite VWAP band.
VWAP slope flattens and curls back.
Entry after reclaim above balance.
Targets: VWAP itself → opposite band.
This sequence appears almost every day in one direction or the other.
Balance vs. Imbalance
Price orbiting inside ±1 bands = balanced market.
Price pressing into outer bands = imbalance (buyers or sellers dissatisfied).
Much of the day-to-day scalping opportunity comes from shifts between balance and imbalance zones, especially during the 10 AM–12 PM transition when US volume takes over from London.
A Messy Real-Day Example
Looking at a hindsight chart:
Initial slope up looked stronger than it was (VWAP alone made it seem aggressive).
A sharp selloff pushed price outside –2 (too extreme for me to ever initiate).
Quick reversal back inside balance offered a proper long setup.
Later in the day, slopes weakened—flattening, chopping, and becoming less “clean.”
⚠️ Key reminder: Trading hindsight looks easy. In real time, you never know the rest of the day’s path. Avoid cookie-cutter expectations.
Multi-Timeframe VWAP Context
Monthly VWAP Bands
I wait 5 trading days into a new month before referencing it.
After 10 days, monthly VWAP gets very reliable.
I don’t use it for tick-precision, only as zones for context.
Example:
Outside +2 monthly band = market is extended, have “head on a swivel.”
At bottom of monthly balance zone = more willing to look for continuation longs.
Weekly VWAP Bands
I give the weekly 2 full days before using it.
Weekly is more precise than monthly—levels matter more intraday.
When weekly and monthly bands align, it’s powerful confirmation.
When they conflict (e.g., monthly bullish balance, weekly strong downtrend), I size down or skip trades.
Process for New Periods
During the first 7 days of a new month (or 2 days of a new week):
I draw lines at the previous period’s VWAP ±1, ±2 bands.
These act as provisional balance/imbalance zones until the new VWAP develops enough data.
Not exact levels—just contextual guides.
Putting It All Together
Using VWAP slope, bands, and multiple timeframes allows me to:
Identify trend or reversal opportunities intraday.
See balance vs. imbalance shifts in real time.
Anchor intraday plays within the broader monthly/weekly context.
Avoid trades when context is conflicting or extreme.
Final Thoughts
This method is less about finding perfect entries and more about:
Eliminating trades with the lowest probability of success.
Recognizing when slope + context = higher confidence.
Using multiple VWAP timeframes to keep “spidey sense” alive about extremes.
As day traders, we’re just trying to take small, repeatable chunks out of the market. VWAP slope and bands—stacked across timeframes—help build the playbook for doing that consistently.
Stay tuned: in the next lesson we’ll stack monthly → weekly → daily VWAPs into a single narrative framework and apply it directly to intraday setups.
