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The first pullback & VWAP hold

The highest-quality momentum continuation setup, step by step.

10 min · Intermediate

What you'll learn

• Identify a valid first pullback after a strong opening move
• Define entry, stop and target for a first pullback and a VWAP hold
• Size the trade from the stop and reject setups that fail the 2R test

Key takeaways

• The first orderly pullback after a strong, high-volume leg offers a defined stop that chasing never gives you.
• Healthy pullbacks come on lighter volume, hold VWAP and give back less than about half the leg.
• Enter on a candle close above the pullback high, stop below the pullback low, and target the next level at 2R or more.
• Repeated closes below VWAP invalidate the setup.

Glossary

• First pullback — The first orderly pause after a strong initial move, used as a lower-risk continuation entry.
• VWAP — Volume-weighted average price for the day; a common line that intraday buyers and sellers watch.
• High of day (HOD) — The highest price traded so far in the regular session; a common first target and resistance level.

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