Hey there, VWAPians!
If you’re not already in my Warlock’s World, first of all, you’re dead to me.
I kid, of course, but if you aren’t in the Warlock’s World at the opening bell each day, you’ve been missing out on some KILLER VWAP trading — and that’s no joke.
Earnings season, the spooky inflation data that sank stocks, and the fact that the MARKET IS RIGGED have all contributed to a rich environment for my style of trading.
Just yesterday, in fact, we witnessed stocks like Walt Disney (DIS), Affirm Holdings (AFRM), and Rivian Automotive (RIVN) make some of my favorite VWAP-trading patterns…
And some of the trades were even ripe for a revisit — something I’ll never say about my in-laws (I kid, I kid).
So today, I want to drop a patented Warlock Knowledge Bomb on when I might go in for seconds on a VWAP trade.
And THEN, I want to spend my Friday getting loose with YOU, so join me right here at 1 p.m. ET TODAY for a LIVE TRADING SESSION.
We might just have to dance it out, if I’m in the mood…
Knowledge Bomb: Keep Coming Back If It Works
Unlike my dog Brody, who has weirdly human eyes, it seems ACTUAL humans are much harder to train — at least when it comes to trading.
The thought is that if you reward good behavior repetitively, the subject will learn to repeat that behavior until it becomes a habit. Like giving your dog a treat for pooping outside.
But when a trade works out, many humans simply forget it and move onto the next stock, even though they were just rewarded monetarily.
Are we dumber than dogs? (Brody just… nodded? Weird.)
Seriously, though, take Yalla Group (YALA) stock, for instance.
Yesterday in the Warlock’s World, someone in the chat noted that they successfully traded YALA TWICE in the first hour of the session.
The father in me was so PROUD.
You can see that YALA shares opened (the shaded area is pre-market) below the 1-minute VWAP (blue line).
But then look what happened after YALA broke ABOVE the VWAP… This thing rocketed from about $7.50 to about $8.20 in a matter of MINUTES.
YALA 1-minute VWAP chart – courtesy of ToS
The dashed line is the Multiday VWAP, the Thinkorswim (TOS) code to which I’ve given all my Warlock’s World family.
(Of course, pretty soon they shouldn’t even need a TOS code. I currently have a team of awesome developers working on a killer charting platform, which I plan to beta test with my Warlock’s World traders in the VERY near future…)
After hitting that early top, the shares found support at the Multiday VWAP, and when YALA broke back above the 1-minute, the aforementioned trader jumped in it AGAIN for another play.
Rinse, lather, repeat.
The point is — if a VWAP day trade has done well once, I like to go back and REVISIT for more action if it presents the same opportunity.
That’s why I keep a rolling Warlock’s Watchlist, after all.
That’s all for now, but I hope to REVISIT with YOU (see what I did there?) at 1 p.m. ET for a LIVE session right here!
See you in the room…
Kenny “The Warlock” Glick
November 12 2021