Market orders are one of the most dangerous things that you can do.

This is especially the case if you are trading small or illiquid stocks or option chains.

When you put in a market order, your shares have to be filled. And if there aren’t enough waiting orders to fill you, you could inflate a stock’s price, which would mean you would get filled at a higher buy price than initially expected.

The sellers out there will be more than happy to take a profit off of you and fill your orders at a loss to you.

The simplest way to get around this is to always use limit orders.

Unlike a market order, a limit order will only fill if your price is hit.

You’ll want to do this BOTH for buys and sells.

The simplest way to trade around the VWAP is that if it’s breaking VWAP on the upside, you buy it, and if it’s breaking VWAP on the downside you short it.

When you are entering into a trade, you want to get caught on the break up above the VWAP with a limit order to get filled.

And then once you are in it, you want to start selling parts of your position at higher levels.

For instance, if you are buying a stock at $10 and it’s jumping up to new highs,  you will want to start putting out your sell orders above where the stock currently is.

If a stock is at $11, put out a sell order at $11.25 or $11.43. If it hits that price, then you’ll immediately be filled and won’t have to worry about getting swindled out of what you were looking for.

You need to guarantee what price you get in and what price you get out.

We stick to stocks with a high volume because it allows us to have our buy and sell orders filled usually all at once. High volume also makes it to the spread on the bid-ask price for a stock is narrow.

Remember that Monday the markets are closed for MLK Day, so I’ll be seeing all of you bright and early for the Tuesday morning show.

Earnings season has officially kicked off, and there’s a boat load of volume out there that is helping us identify trades and secure some gains.

If you had any burning questions on anything day-trading or VWAP related, feel free to send them to

We read through all the questions, and I’ll be happy to answer anything you may have in these pages.

Have a great weekend and see you Tuesday morning!


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