When you’re day trading these markets are going to crush you if you hold stocks overnight.

My motto is I am “liquid and lovin’ it”.

And this week has proved to me a couple things…

One is that you should never hold stocks overnight (especially before an earnings announcement). And the other is that VWAP trades work every day.

Let’s take for instance one of the many trades that worked yesterday with Bed Bath and Beyond (BBBY).

If you’re listening to the talking heads in the media, you’ll know that this company is going out of business.

So why did we try and trade it yesterday?

It’s because the VWAP told us to.

Price is the only thing that we care about, and yesterday’s action was just one of many winners.

But BBBY wasn’t just one of those buy it at the beginning of the day and let it rip, as seen in the chart below.

You see, if you bought it at the beginning of the day, you would have been stopped out as it rolled back over.

Or at least, I hope you would have been stopped out.

But Kenny, the stock’s price went up later that day.

THIS TIME it did. But we can’t let this one time dictate what we do with our positions.

What if it tanked back down to $1.00 from $4.00? You would have been holding the back, hoping and praying that it would have moved back up.

Don’t hope that a stock is going to go up. KNOW that it will.

After you would have been stopped out, look back and see that red circle for a second confirmation of a buy.

Why was it a second confirmation?

It was consolidating at the VWAP in a tight range between $3.40 and $3.50.

That meant that if the stock were to break this in either direction, you would want to be in that trade on either side.

What happened in this case is that it broke that $3.50 mark, and if you had an order out to buy it, you would have been able to get in on the move up.

Even if you missed the initial move, getting in five cents higher would have allowed you to capitalize on a profitable trade.

The stock then went all the way up to $4.75 that day.

That is $1.25 profit on a $3.50 stock.

This may not seem like a lot when you look at it on paper. But think of it like this…

The percent alone is a 35% gain.

That means if you bought 100 shares at $3.50 — a $350 investment — you would have come out with a $175 profit.

1,000 shares get you $1,750 in profit.

And 10,000 shares get you $17.500 in profit.

You get my point.

In the initial trade you were risking ten cents to make a dollar.

You would have had to have ten losers in a row to cancel out the gains made from just one VWAP trade.

If you ever need to know which stocks to target for the trading day, I send you a watchlist to your inbox every morning.

My suggestion is to take just one or two of these stocks I list, follow it like a hawk, and make trades within your comfort zone.

As always, set your stops, use the VWAP and don’t stop following a stock just because the first one went south.

If you would have done that with BBBY, you would have missed a killer second move upward.

As always, feel free to shoot me an email at KennyGlick@MoneyMapPress.com if you had any questions or topics you wanted me to go over.

I’ll see you all in the morning!


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