VWAP gives you the day's value area at a glance. When gold is trending clean, a pullback into VWAP is a zone worth watching.
The core setup
On XAU/USD, VWAP acts as the intraday value area. Gold running clear above VWAP, you only look for BUYs when price pulls back into it. Gold below VWAP in a clean downtrend, flip it and look for SELLs.
How to enter
A touch of VWAP is not an entry. You want a reaction candle, a pin bar, an engulfing, or a close that shows the bounce has some force behind it. The cleaner entries come after price tests VWAP without slicing straight through it.
Managing the trade
The stop usually sits below or above the signal candle; on gold that's roughly 15-20 USD depending on the session. Scale the target around 15 and 30 USD, or aim at the nearest VWAP standard-deviation band.
When to skip it
Skip it when M5 ATR is low and gold is chopping sideways around VWAP with no direction. When gold goes flat, spread and noise grind a scalp down to nothing.
If you trade gold in the US session, remember the setup needs a clear trend first. A touch of VWAP, on its own, is not a reason to enter.
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Publishing note: This content is not investment advice. Always test on demo and take responsibility for your own risk management.