GC/MGC VWAP Pullback + ADX Regime (Prop-Safe)

GC / MGC VWAP Pullback + ADX Regime Strategy (Prop-Safe)

This strategy is designed specifically for Gold futures (GC & MGC) and prop firm trading, where capital preservation, consistency, and avoiding chop matter more than trade frequency.

The core philosophy is simple:

Only trade gold when it is expanding, aligned, and at the right location.

Strategy Concept

Gold moves in bursts, not constantly.
Most losses come from trading compression, VWAP chop, or late momentum.

This strategy filters those environments out and trades only:

Strong intraday momentum

Clear higher-timeframe direction

First pullbacks to VWAP

Clean price rejection with follow-through

It intentionally produces fewer but higher-quality trades.

Market Regime Filter (ADX)

ADX is evaluated on the 5-minute chart

This is the trade permission filter

ADX zones:

Below 18 → No trade (compression / chop)

20–35 → Optimal trading zone

35–45 → Caution (strong trend, reduced opportunity)

Above 45 → No new entries (late expansion / news risk)

ADX does not determine direction.
It only determines whether trading is allowed.

Direction Filter (Higher Timeframe)

Direction comes from the 1-Hour chart

EMA 20 above EMA 50 → Long bias only

EMA 20 below EMA 50 → Short bias only

Optional slope confirmation for additional strictness

No counter-trend trades.

Entry Logic (5-Minute Chart)

Trades are taken using a VWAP pullback continuation model.

Long Setup

ADX between 20–35

1H EMA 20 > EMA 50

Price pulls back to VWAP

Bullish rejection candle at VWAP

Entry on break of the rejection candle high

Short Setup

ADX between 20–35

1H EMA 20 < EMA 50

Price pulls back to VWAP from below

Bearish rejection candle at VWAP

Entry on break of the rejection candle low

All entries use stop orders, not market orders, to ensure follow-through.

Risk Management

Stop loss is placed beyond the rejection candle

Partial profit at 1R

Final target at 2R

No pyramiding

One clean setup is preferred over multiple trades

This structure aligns well with prop firm rules, trailing drawdowns, and consistency requirements.

What This Strategy Avoids

VWAP chop

Range-bound sessions

Overtrading

Late entries after news spikes

Counter-trend setups

If conditions are not ideal, no trade is the correct trade.

Best Use Case

Instruments: GC, MGC

Timeframe: 5-minute

Style: Intraday, prop-firm friendly

Ideal for traders who value:

Discipline

Structure

Capital protection