Identifying patterns in charts is one of the best ways that you can make money as a day trader.

Without it, you’re completely lost and are gambling your money away — calling up hope and faith that your stock is going to go up instead of cratering to new lows.

With chart patterns however, you can easily determine what a stock is going to do.

And when you add the VWAP onto your charts, it gets even easier.

(You can freshen up your chart pattern knowledge by clicking here.)

We did this today with PYPL, and made ourselves a killing, simply by being able to define exactly when a trade would take off.

PYPL’s movement today is what I like to call a Kardashian bottom.

It forms in four distinct legs as a stock plummets below VWAP, tries to come back up, falls back down again and then shoots up to the VWAP and beyond.

I call it a Kardashian bottom because it forms a butt or a W formation.

This kind of formation happens every day in different stocks, and can be seen in the image below.

When you have this kind of W formation, you want to put your buy order in just above that VWAP line.

Then if you’re filled when it breaks, you’ll ride it on the way up.

When something like this happens, you want to sell into the move a little bit at a time.

Don’t sell everything at the next leg up or else you’ll miss on the potential move even higher.

You move up your stops, sell a little at a time and sell everything before the end of the day.

At the end of the trade we saw a $2 upswing in an hour.

Buy 100 shares of that and you have $200 in your pocket. Day’s over…

Now if you want to up your game even more, you’ll want to buy options on these kind of moves.

What kind of options you ask?

If you want to mimic the movement of the stock, you want to buy at-the-money (as close to the current price as possible) weekly options (expire at the end of the way).

This will multiply your profits on trading the VWAP tenfold in some cases.

Take this lesson on identifying the Kardashian bottom and use it next time you see it to crush the markets and get yourself a day’s pay.


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