If you’ve ever looked at the charts and thought, “I want to make some profits, but don’t want to sit and trade all day”, then you might want to consider scalping.
It is fast-paced, full of adrenaline, and, if you do it the right way, can prove to be profitable in the long run.
One of the simplest ways to scalp the markets is by using VWAP in conjunction with Support and Resistance levels.
1. What is VWAP, and Why Should You Care?
VWAP stands for Volume Weighted Average Price.
You could think of it as Daily Average Price but takes volume into account. Institutions would actually use it to determine if they are getting good value.
If price is above VWAP → Buyers are winning → Bullish sentiment.
If price is below VWAP → Sellers are winning → Bearish sentiment.
And the cool thing is: VWAP behaves like a dynamic “fair value” line for the day and prices tend to respond to it.
2. Support and Resistance – The Basics
Support = A price at which the buyers tend to enter and stop the price fall.
Resistance = A price at which the sellers tend to exit and stop the price rise.
Think of support like the floor of a building and resistance as the ceiling.
For intraday trades, these can be found from:
The previous day's highs and lows.
Pre-market highs and lows.
Swing points within the day.
3. Why This Combo Works for Scalping
The VWAP gives the overall direction for the day.
Support and Resistance gives you the exact points where the price can bounce off or reverse.
Combining both gives you the following:
A clear trend filter
High probability entry points
Tight stop-loss levels for low risk trades
4. The Step-By-Step Scalping Plan
Step 1: Set Up Your Chart
Set your chart to either a 1-minute or 5-minute timeframe as these are most suited for scalping.
Add the VWAP indicator to the chart. Default settings work best.
Mark intraday support and resistance levels.
Step 2: Decide Your Bias
Price above VWAP → Look for buying opportunities.
Price below VWAP → Look for selling opportunities.
Step 3: Find the Entry
For Long Trades:
Price is above VWAP (bullish bias).
Price pulls back to a support zone near VWAP.
Look for strong green candle, volume spike, or rejection wick.
Take the position and target a small gain (quick 0.3-0.5% or a few points).
For Short Trades:
Price is below VWAP (bearish bias).
Wait for the price to pull up to the resistance zone near VWAP.
Look for bearish signals such as a red candle, rejection wick, or large sell volume.
Enter and take profit quickly.
Step 4: Risk Management
Place a stop-loss just beyond the support/resistance level you’re trading from.
Maintain a risk-to-reward ratio of at least 1:1.5.
Do not hold too long. Scalping requires quick exits.
5. Example of a Very Quick Long Trade
Let’s say:
The stock is at ₹500 and VWAP is at ₹498.
There’s decent support at ₹497 from a low yesterday.
The price then dips to ₹498.2, which is close to the VWAP, and a bullish engulfing candle forms.
Entry at: ₹498.5
Stop-loss at: ₹497.5
Target at: ₹500.5
This trade can be executed in minutes. It’s a small move, small risk, and a decent reward.
6. Pro Tips for Making It Work
Pay attention to volume. Strong moves and reversals are more trustworthy if volume is present.
Don't trade when price is just swimming around VWAP.
The first 1 to 2 hours after the market opens are prime for clean scalping.
Avoid overtrading. 2 to 4 quality setups is plenty for the day.
7. The Bottom Line
Scalping using VWAP and support/resistance is like driving with GPS.
VWAP serves as a directional compass while support and resistance are the stops where action is taken.
For people who like trading, but don’t want to be tied to their desks all day, this is perfect. It is fast, simple and keeps your risks in check.
