Did you know that TONIGHT at 7 p.m. ET, Money Morning LIVE is celebrating our One-Year Anniversary Event???
I can’t believe it’s already been a whole year. They grow up so fast.
Something you may hear me say frequently during my Warlock’s World live stream is the phrase “sell into the move”.
I frequently get asked what this actually means.
In Warlock’s World, I teach my community how to use the institutional trading tool known as VWAP – Volume Weighted Average Price.
Institutions use VWAP as a sort of barometer for their trades throughout the trading session.
Say a trade desk is tasked with buying $50 million shares of a certain stock. They’re not going to plunk it all down on one trade.
They’ll scale into a position throughout the day, attempting to get the best price possible, usually as close to VWAP as they can get.
But there’s also a combination of short sellers, retail traders, competing institutions and hedge funds that create the ebb and flow of the market.
So there could be a point where a trade desk is scaling into a position, which in turn traps some shorts, which causes an outsized move to the upside.
In Warlock’s World, we’re joining into this move.
Remember, the trend is your friend.
Because price tends to come back to VWAP eventually.
Because it’s rare for a stock to stay on one side of VWAP all day.
A BIG reason I like to be nimble is that this “mean reversion” characteristic of VWAP can result in sharp pullbacks, aka the candle of death.
So instead of holding, hoping, and praying that a stock continues to go up, I sell into the move, raising my stops along the way to protect any potential profit.
Another part of selling into the move is that I never exit my position at one price.
We get in, we capture the move, and we get out.
Stay nimble, my friends.
And I’ll see YOU at tonight’s One-Year Anniversary Event!
Kenny “The Warlock” Glick
March 24 2022