Free lessons › VWAP Reclaim / Reject › Trading VWAP
Rejection short setup
Failed reclaim → continuation lower.
8 min · Intermediate
What you'll learn
- Recognize a failed VWAP reclaim and the trapped buyers it creates
- Structure a short entry with a stop above the rejection high
- Size a short (or a put alternative) to 1% risk with at least 2R to the next level
Key takeaways
- A failed VWAP reclaim traps early buyers, and their stops fuel the move lower.
- Enter on the break of the failure candle's low or a volume-backed close under VWAP.
- The stop belongs above the rejection high, not just above VWAP.
- For puts, size on the premium at risk per contract (price x 100), not the stock's stop.
Glossary
- Failed reclaim — Price closes back above a level such as VWAP but falls back below it within a few bars, trapping buyers.
- Rejection high — The highest price reached during a failed attempt at a level; shorts place their stop above it.
- Trapped traders — Traders caught on the wrong side of a failed move whose exits add momentum in the other direction.
Unlock this lesson
The full lesson, quiz and practice task are included with the Academy plan. Elite includes a 7-day free trial. See plans