YouTube Transcript:
VWAP strategies for profits in Stock Markets!! #Face2Face with Brian Shannon

hello hello hello my dear friends this is your  friend vivek bajaj co-founder of stock edge  
and inland markets friends yet another to face  global and yet another super excited video i'm  
going to touch a very very important topic today  multi-time frame analysis and with me i have the  
master of multi-time frame analysis you're going  to enjoy this video this learning please watch it  
till the end i mean it takes an effort to reach  out to the right people and get them on board for  
your learning this is going to be very exciting  learning we are going to discuss multi-time frame  
we are going to discuss a very important indicator  which the expert is using so hold on this is great  
and if you have joined me for the first time face  to face is a series which i run it has more than  
45 million views and if you have not become part  of face to face do subscribe to the channel elon  
markets well without spending too much time on  this let me welcome dear friend brian shanahan  
hi brian hi vivek thanks for having me on here  good morning from india and good evening from u.s  
did i spell your name correctly uh brian  sanon shannon shannon okay thank you so  
much for correcting me there so it's great  to connect with you and uh you know i know  
uh you're very active on twitter and we got  connected to twitter that's the power of twitter  
you know you can reach to anyone at any uh you  know within any objective and uh i know about you  
so let me just introduce uh people um to you uh  sorry let me just introduce you to people see i'm  
already nervous but i'll try to cool keep my cool  and calm uh so let me introduce a brian shannon  
is an american author and technical analyst he  published his book called technical analysis using  
multi-time frame in 2008. he's an avid educator  he's a market participant he's a trader and you  
know he's the one of the best indie traders  in the business that's what people call him  
so you know this is a short introduction from  my side but obviously we want to hear more from  
you brian how did you start this journey what has  been your background please tell us more about you  
yeah sure i i first got my interest in  the uh markets um uh through my dad he  
he would watch uh wall street week here in the us  which i'm not sure if you guys are familiar with  
um and when i was a teen and you know 12 13 years  old i would sit there on friday nights and watch  
this uh market show with them and i started  picking up little things about the market and  
asking questions and then finally did a trade uh  you know my first equities trade i think was 15  
i had put up 500. my dad loaned me 4500 basically  10 to 1 margin um and we bought a thousand shares  
of a five dollar stock that stock doubled in the  next three months and needless to say i was hooked  
on it i thought you know why do people get jobs  why would anyone work when you can make money  
like this especially at that age so that was uh  you know i graduated college in 1991 from there  
i went to uh lehman brothers in boston and uh  worked as a stock broker for a little bit moved  
to denver colorado uh in 91 as well 92 actually  and i've been here since and you know during that  
time i was a broker for a retail firm for a little  while i like to say i've got the opportunity to  
practice with other people's money and you know  i did make mistakes with other people's money but  
it wasn't you know big mistakes or anything like  that but i i definitely learned a respect for risk  
and you know after about a year or so of being  a broker at that firm i branched out you know  
basically graduated from a a salesman which a  stock broker is basically uh to a trader i you  
know found a firm that gave me leverage and i used  uh you know every last penny that i had saved and  
you know went to work for for this firm trading  it was uh i think i was 23 years old and man i  
if i if i had to do it again the way i did it back  then today i don't think i would meaning that you  
know i was young and i could afford to take risks  i had nothing to lose basically um so you know i  
i would i did have a strong respect for risk so i  was immediately profitable and profitable each of  
the months that i was with that uh proprietary  trading firm out of new york i opened an office  
for them in denver and then opened my own day  trading office so this was you know 1993-94
and then kind of started with another  firm where i headed up their pri prop  
desk some educational content i still i you know  i still have traded pretty much every single day  
since then so you know really my passion for the  market comes from my day-to-day activity in the  
markets so here i am today you know as you said i  wrote my book in 2008 i'm working on another one  
based on you know the anchored volume weighted  average price and uh i run a site called alpha  
trends the best way to find my information  where i put out you know my public stuff  
is on uh twitter where my handle is uh alpha  trend so that kind of gets us up to speed here  
yeah yeah absolutely yeah so you know brian um  so you said that you graduated in 1991 so how  
old you are i'm 54 years old oh my goodness okay  let me ask you this question do you think fitness  
has anything to do with success in stock market  i do yeah and i you know i i try to stay healthy  
and active and uh um you know i think i think you  you know you hear the phrase healthy body you know  
healthy mind healthy body and you know they feed  each other and you know if when you you maintain  
physical fitness you sleep well your brain  is rested you can engage in you know a pretty  
stressful activity and where you always have to  be thinking especially on the time frames that  
i'm engaged on i i'm a swing trader primarily so  i i ideally like to hold stocks you know a couple  
days to a couple weeks but you know it's up to  the market it's not up to me how long i i hold if  
i decide how to long to hold it's probably going  to be a loser you know in other words if i'm not  
listening to the market especially now with all  the volatility that we're seeing in the markets  
um that you know i've got to listen to the  message of the market and right now you know  
today being what's the 24th of january we had an  extremely volatile market in the u.s market and i  
did nothing but day trades today simply because  that was the opportunity there i didn't i don't  
necessarily want to be a day trader but you know i  i'm here in front of the machine this is what i do  
and that's where the opportunity is again i have  to listen to the market i don't i can't you know  
tell the market what i want it's not going to  listen to me true and one more question is that  
if you look back your your career your life  would you like to change anything there  
you know i i get asked that from time to time and  you know i could say well i wish i did this or i  
wish i did that but you know where i am today  is it it's it's based on all the mistakes i've  
made it's based on all the successes i've i've had  i'm really not one to look back and regret and do  
uh shoulda coulda woulda type stuff i'm where  i am today because i went through the school  
of hard knocks now maybe i could have done things  slightly differently i i honestly don't know what  
those things would have been because you know i i  learned by doing um my biggest mistakes have been  
my best lessons yeah and without you know i could  say i wish i didn't lose that much money that one  
day or that one month but it's me it makes me who  i am so i i really don't think about it that way  
i think about here's where i am let's engage with  the cumulative knowledge i have and try to be as  
best as i as i can be here today sure sure um  you know the last question before we go to the  
conceptual discussion is that you know there are  a lot of youngsters who have come into the market  
and uh immediately after graduation  they have just gone into the market okay  
uh and you worked in some reputation firms  before you actually came into the market full  
time for example you worked in goldman you just  mentioned do you think that experience of working  
in a large firm shaped your career to to take  a better decision to do on your own or let me  
put it the other way do you think a youngster  should not get into the market from day one  
maybe work somewhere for some time get that right  experience and then get into the market full time  
i i think you're better off you know not getting  into the market full-time right away because  
you're going to be there making a lot of  mistakes not learning from your mistakes rather  
than getting some guidance from some structured  program whether it be you know go get your cmt  
uh you know for instance or go work  for an investment bank under a trade  
another trader try to figure out different  areas in the market and maybe trading is not  
the right you know route for for for someone out  there maybe they're better off as an investment  
banker maybe they're better off as a broker or  going into mortgages or selling insurance you  
don't know until you try a few things out you know  and when i was starting out as a retail broker you  
know my my manager at the time said you have to  get your insurance license and i was like i don't  
want my insurance license i'm not gonna i'm not  gonna pass that i'm not doing it but i did pass it  
i learned some good things and i was stubborn but  you know it gave me the experience to see things  
differently see things through a different lens  if you can work especially if you can you know  
find a way to go work for a big fund and figure  out how the big money really moves but money and  
markets around uh and then figure out how to  you know look at different time frames and  
that's the key you know it's not just what area  the market can be in one of the most important  
things is time frame and knowing your time frame  that we can be in a bull market on one time frame  
but begin the snot kicked out of us on a shorter  term time frame where you're just losing money day  
after day and people will say hey but we're in a  bull market but your time frame is you know you're  
leveraged up and you know making all the mistakes  that young people make um so go you know go get a  
job somewhere else look you know get a salary get  some benefits learn some things swirl your money  
away do some trading on the side and then progress  to being a full-time trader sure that's pretty  
fair advice uh so brian uh i have i'm blessed that  today is the day when market was very volatile  
and you actually traded from swing to day to day  so you know if i can also get some input from you  
that how do you trade in these kind of a market  using the methodology which you will share with us  
so can we just start the discussion on the concept  yeah so basically the you know the markets as we  
know are fractal and and for people that don't  understand what that means it it basically means  
if you take your analysis on a weekly chart and  look at the you know the trends that they're in  
you could take that same chart not know that it's  you i could tell you that it's constructed of  
monthly bars or candles but it might actually  be constructed of one-minute bars or candles  
and you honestly wouldn't know the difference  a lot of the time so the the point of you know  
fractal is that the patterns repeat on different  time frames which is great because that's what  
makes technical analysis transferable from longer  term investing to swing trading to day trading  
once you learn the concepts of trends how they're  formed how they develop how they're sustained  
where to manage risk underneath successive higher  lows in the lungs or above lower highs it doesn't  
matter what time frame you're on you can you  know use those same principles on any time frame  
and those are you know looking at multi-time frame  analysis um looking at you know basic tools price  
volume and again multi time frame so the three  of those are the basis of the volume weighted  
average price price only price pays volume tells  us the intensity of the market moves and time so  
today we saw the biggest volume in probably a year  in the s p 500 we were down a whole bunch in the  
morning we rallied back and closed right near  the highs so it seems as though it's you know a  
near-term turning point to measure risk against  and it's always about risk management true true  
so let's get it going so i guess you will share  the screen and let's uh let's go through the  
concept you have made a lovely presentation for us  so first of all thank you for that okay we're good  
yeah we are good to go okay so we're gonna focus  a lot on you know the anchored volume weighted  
average price and one of the biggest questions i  get is where do you anchor from um and we'll get  
to that but first you know before we cover any of  this the the first thing you have to understand is  
basic market structure and this is something  that i learned from stan weinstein it's also  
you know been written about by uh wyckoff and a  guy named joe kerr back in the early 20s but what  
it does is it breaks down the market cycle into  four stages the accumulation stage is kind of  
where it's been in a previous uptrend and it's  broken down and gone sideways and you know there's  
a phrase during these you know if they don't  scare you out on the way down they'll typically  
wear you out it's the process of lit ritting  the sellers and the buyers regaining control  
it's basically a period of neutral market you  know that that i don't want to be involved in as  
a trend trader instead i want to focus on  for long's the stage 2 uptrend if we're in  
an uptrend well then we're innocent until proven  guilty meaning that you know we expect you know  
that based on you know charles dow and the  tenets of technical analysis one of them is  
a trend once established is more likely to  continue than reverse so i i don't want to  
buy after the you know five day you know surge but  i want to anticipate the little moves after you  
know a three to four day pullback and use multiple  time frames so that's what this chart is showing  
here on the left is if we took this little boxed  in area during this stage two and we said abcd you  
know if it's pulling back on the short term time  frame we don't want to get involved and actually  
put an example in here with one of your indian  stocks and i will forgive me i've never looked at  
an indian stock in my life just because i you know  i i'm us-based i trade u.s stocks but they're the  
concepts even there you know i i we we can look at  some live ones and they're they're going to be the  
same exact concepts stage three occurs after the  markup we have a chance where the market starts to  
turn sideways and we certainly saw that you know  first as the russell 2000 s p 500 and now we're in  
a stage four decline in a lot of these markets  guilty until proven innocent so what we want  
to do is come up with a plan of action for each  one of these stages so in the accumulation stage  
one where it's kind of going sideways we're going  to anticipate where to participate in a new long  
or we're going to cover our short because it's  no longer going down instead it's turned sideways  
there's no longer an advantage to being short  stage two that's where we participate on the  
long side and we want to avoid shorting now we can  make money shorting stocks that are in up trends  
but the simple math of higher highs and  higher lows means the sum of the rallies  
is greater than the sum of the declines so there's  naturally more opportunity to trade the long side  
and avoid the little pullbacks some people like to  you know short the little pullbacks and if you can  
make money like that consistently that's what you  should do and that you know that's one of the keys  
is as i you know that you know people have to find  out what is their time frame what is the market  
they trade are they commodity traders u.s stock  traders crypto traders solely indian stocks it  
doesn't matter you've got to do what works for you  don't listen to other people and say you've got to  
do this or that stage 3 you know the the uptrend  is kind of exhausted itself you're going to start  
getting stopped out of your long trades and you're  gonna start to say hey it looks like it has the  
potential to break down so in the u.s market we  saw all these big leaders peloton uh you know zoom  
we saw roku square paypal they were all breaking  down prior to the index so we were seeing you know  
weakness under the surface and finally the index  gave it up basically about a week and a half ago  
so we want to anticipate where the other short  opportunities and then in a stage four decline  
that's where we participate on the short side  and avoid the long side again we can make money  
trading those bounces and sometimes they can be  you know some of the most spectacular bounces  
there are or you know spectacular short-term  rallies occur in a downtrending market so if  
you're nimble and you can day trade for instance  like i said you know i was day trading today  
we you know we did finish positive we were down  most of the day so we want to you know anticipate  
the moves so we're not chasing things participate  when we have price confirmation exit when the  
market tells us to and then avoid it so here's  here's an example of uh larson and toubro yep  
okay so this is i guess one of the nifty 50  stocks and you know on the left we see here's  
a daily time frame it's clearly in an uptrend  you this green line is the 50-day moving average  
it's innocent until proven guilty  with a rising 50-day moving average  
there are pullbacks in here and certainly you  can make money shorting those but the sum of  
the rallies you know it goes from 1720 to 2000  back down to eight you know 1760. the sum of the  
rallies is greater than the sum of the declines  so this highlighted area here is simply this chart  
on the right so we're magnifying it to 30 minute  candles and i don't even know if that's the proper  
uh amount of time for the indian market i don't  know if those are equal if there are 30 minute  
increments that are equal like here in the u.s but  this is how i do my analysis it's pretty much okay  
it's pretty much valid for india as well oh okay  good good to know so you know in this period right  
here just to this side you can see we had you  know two down days and then we have this kind  
of sideways it breaks a higher high here so we're  anticipating you know we're avoiding this little  
pullback right here we're anticipating in here and  then as it breaks higher we want to participate  
and as long as making higher highs and higher  lows on the shorter term time frame then we  
want to stay with that trend and raise our stops  up underneath these successive higher lows when  
it makes a lower low well then we exit that's it  the definition of trend is no longer valid for the  
time frame we're engaged in so there's no reason  to be involved any longer so in there you can  
see that exit occurred you know it didn't occur  at the high only the liars exit up there right  
um so we want to participate you know in here  we don't want to try to buy the low we in other  
words we don't want to buy pullbacks we want to  buy strength after the pullback and then we want  
to exit as the trend gets tired and starts to make  that first lower low it's got this high it's got a  
lower high than a lower low so as it breaks down  yes of course you can short this and make money  
but because it's in a primary stage two uptrend  i look at and say i'd rather wait it out wait  
for it to undergo accumulation again and have  the trends aligned at this point right here  
the trends are aligned the daily time frames  is an uptrend in this 30 minute time frame  
is an uptrend that means i have the maximum  you know i have i have momentum in my favor  
i ha i'm getting in at the beginning of this  unfolding move i don't know how far it will go but  
you know if it's truly an uptrend it's gonna at  least you know take out this prior high which of  
course it did and you know then manage risk and  again you can make money shorting here but my  
philosophy is i want to look for trend alignment  and i personally avoid these because they can go  
against you really strong and if you're going to  short them you know i like to say do it with half  
a risk unit if your normal risk unit is a thousand  dollars you know when trends are aligned only risk  
five hundred dollars you know based on where your  stop is and that's the way you know i like to look  
at you know first market structure and then start  to add the tools sure brian uh this uh one day  
and half an hour is it your standard template or  you uh you keep on changing it depending upon the  
instrument or market condition or anything yeah  well on my screen so i've got several screens  
of course um i've been doing this 31 years and  i've you know started adding more and more stuff  
my analysis remains really simple but i like to  have the extra real estate so on my screen i have  
a weekly chart up here then i have a daily  a 65 minute 30 minute 15 minute and a two  
minute so when i click on a symbol it populates  all of those at once so i'm instantly aware of  
you know the really big picture on the weekly  time frame the daily time frame and that doesn't  
really get a lot of weight in my decision for  a swing trade but i still want to be aware  
what are the key levels on the bigger time frames  am i pressing my shorts too too far because we're  
coming into this bigger level where am i you know  pressing my lungs too much because we're coming  
into this prior big level of support which has the  potential to become resistance so it's it's my my  
main time frames i guess vivek you could say would  be a daily time frame is where i like to identify  
what my opportunity is and then i will look at a  65 minute or 30 minute so in the us we're open for  
six and a half hours a day that's 390 minutes so  i want something that's equally divided into 390.  
so a 65 minute time frame there are six equal  candles if i used an hourly chart it would be  
from 9 30 to 10 a.m eastern is would be one candle  and then 10 to 11 11 to 12 so i'd have one 30  
minute candle in six six sixty minute candles so  the way around that is to make 65 minute candles  
there's six of those that are equal or there are  13 30 minute candles 26 15 minute candles 39 10  
minute candles etc so that's where i you know the  the 30 minute and 65 minute i kind of look to see  
what's my risk reward is there's sufficient  reward potential here for my perceived risk  
and then the shorter term time frames down  into that five minute and two minute area  
that's where i really like to fine-tune my entries  look at the daily volume weighted average price  
maybe yesterday's volume weighted average price  and really fine-tune my entry so i can get in  
just as the momentum is beginning on the shortest  time frame and hopefully it will become aligned  
with the bigger picture and that gives me a  head start on most other people who are waiting  
for breakouts waiting for volume to come in  to me it's price based first i'm aware of  
the volume patterns and i want to see you know  volume expand on the way up peak at the turning  
point diminish on the retracement and then  as it starts to rally again when i'm buying  
the volume isn't there yet the volume comes in  an hour three you know three hours a day later  
often in you know i'm i'm trading liquid stocks to  begin with but i'm saying the expansion of volume  
where people who've been waiting for volume  i might get involved in a 30 dollar stock  
and they're getting involved at 3120 because  that's when they start to see the volume  
by that point i'm taking a third off and saying  go ahead here's your breakout there's your volume  
take some from me so it's it's always about  anticipating and risk management i want to  
take that first third off even though i think it  might be able to go to 35 38 dollars per share i'm  
going to sell some at 3120 or whatever the number  might be because i want to reduce my risk on the  
first part maybe raise my stop to break even now  i've taken all the risk out and you know that's  
really the key is risk management sure so can i  safely assume that uh you try to enter in the uh  
towards the end of the stage one uh with the lower  time frame so that you are literally the initial  
ones to enter the stock yeah it's actually just  at the very beginning of that stage two on the  
shorter term time frame and you know i i've gone  in at certain times where i've seen that level  
where it's it's had resistance the last two and a  half days at 31 you know 31 dollars or 30 dollars  
per share so i'll go in there and it'll i'll  look at my you know i'll set an alert at 29.90  
i'll put it in a level two screen i'll start  watching it if i start seeing a little bit  
of volume or you know i i see the the offer is  disappearing you know and it just seems like the  
frenzy is about to build for this breakout i'll go  in at 29.95 and i'll put in a uh a limit order for  
for 5 000 shares at 30 and 10 cents  if i see you know 1800 shares offered  
i'll clear the book and create that momentum  and then if i get filled on you know eighteen  
hundred shares then i've got thirty two hundred  shares bid at thirty dollars and ten cents  
that'll induce other people to either join the  bid or cut in front of me or go take the offer  
so i'm trying to help nudge it at that point as  well now i don't do that all the time and you  
really need a a good healthy market to do that  yeah and gotta you you've got to have confidence  
in what you're doing and you know position  of strength for the week and for the month so  
you know i don't want to give the impression that  i'm out there moving stocks yeah but but sometimes  
i'll try to you know provide that catalyst as  well sure got your point yeah please continue  
okay so what we're going to mainly talk about is  the volume weighted average price and this is the  
scales of justice and you know the the the ladies  you know the the scale i don't know what they call  
her i should know this um is blind to all evidence  he just seeks the truth so what we're talking  
about in the market of course is supply and demand  and what we're looking for is the equilibrium  
points and the points where that comes out of  balance and then we you know in in the volume  
weighted average price allows us to objectively  do that we are basically looking at this market  
with blinders in terms of support and resistance  and you know who has control the buyers or sellers  
so number one price is the truth it's the final  arbiter people argue all day long on twitter or  
whatever about no you're not right about that  chart or you know you drew that trendline wrong  
i really don't care i'm you know i i'm not  i i never debate people about a stock and  
you know i've been doing it long enough i have  faith in my system that i know where my stop is if  
you don't agree with me go short it and i'll buy  it from you don't argue with me about it i'm not  
you know this is an academic exercise  we're not competing for a phd degree  
we're trying to make money so if you think it's  that i'm wrong go take the other side of the trade  
because price is truth and it settles all of those  arguments and i'll know i'll get out if i'm wrong  
i've been wrong a lot i'll continue to be wrong  a lot but i will protect myself and get out  
yeah what we're talking about are the laws of  supply and demand they call them laws because they  
are truths they are not the theory of supply and  demand they are actual truths of supply and demand  
and that's what the volume weighted average price  really measures without any doubt at all it tells  
you definitively from any point where we start  a v web who's in control the buyers or sellers  
so it's really the most objective measurement you  can find and i i will challenge anyone to show  
me something otherwise but it doesn't exist so we  want to be aware of where is the stock in relation  
to the volume weighted average price what's the  direction of the volume weighted average price and  
of course we're always looking at multiple time  frames we don't want to fight the bigger trend  
because we see a short-term you know opportunity  if we do see that short-term opportunity it's  
against the primary trend again smaller risk  units to compensate for the fact that you're  
not trading with the primary trend so the way i  look at the volume weighted average price levels  
people always say hey is that you know do you buy  pullbacks to the 50-day moving average just just  
as an example to to talk about the psychology the  the 50-day moving average often acts as support  
the reason it often acts as support is because  we have so many people trained to look at it  
who have been taught that it is support so they  stop shorting as it gets down to the 50-day moving  
average they might start to cover some of their  you know maybe it was two standard deviations  
above the 50-day moving average so some big hedge  fund shorts 100 000 shares and they cover it  
down at the 50-day moving average um they you  know they stop selling they start buying back  
and then what is sideline cash to do we've got a  mutual fund with 5 million shares it ran from 30  
to 35 they sold uh what i said they have 5 million  shares they sold 200 000 shares on the way up  
250 000 shares it pulls back to the 50-day moving  average they'll stick in a bid for 50 000 shares  
because they want to protect the rest of their you  know four and a half million shares they have left  
and stick in a bid to induce other traders to  come in and say hey look at that big bid there's  
buyers there so we have lack of supply we have  more demand from the shorts covering from the  
institution trying to protect their position and  then you have sideline cash saying hey it's at  
the 50-day moving average the 50-day moving  average usually acts as support i'm going to  
stick in a bid and lo and behold that's why we  see the 58 moving average or a 61.8 retracement  
or a volume weighted average price or whatever  technical tool you know trend line often becomes  
supporter resistance because there's enough people  coming to that same conclusion in the same spot  
so if we have a 50-day moving average lined up  with the volume weighted average price since  
the beginning of the year and a 61.8 percent  retracement you know let's just say we have  
all these three things coming together maybe we  have the fibonacci group all coming to the same  
conclusion based on hey i'm going to stop selling  short i'm going to start buying back you know in  
in we have they become stronger when there's a  confluence of indicators so the way the way i  
look at it is again we identify that key level on  the bigger time frame and to me that's the daily  
time frame and then we look for evidence that the  buyers are actually gaining control we don't just  
stick in bids blindly hoping that it's going to  occur we don't have to buy 300 000 shares we're  
looking to buy you know maybe 500 shares maybe 5  000 shares maybe 10 000 shares you don't have to  
do the dirty work of creating the support let the  institutions do that so to me it's a place to say  
it's a level of interest let's look at shorter  term time frames one question right so you know  
bran all these standard indicators like 20 50 100  200 these are these have been used for many years  
and you know what i'm seeing that uh the algos  they have been mapped to these indicators  
and because algos have also this character of  uh fooling people so they will typically take  
the price just below the 50 period moving average  and reverse it from there so what i am getting a  
sense after of your discussion is and please  correct me if i'm wrong that only one number  
may not be a perfect conclusion maybe a  convergence of viva 50 period moving average and  
certain more indicators and if you have a range  that okay the demand zone is around 30 to 30.5  
that's the range typically one should accept as  a demand zone rather than one particular price  
point am i right or wrong oh you're absolutely  right and you know to me it's a bonus when you  
see a confluence of indicators i was just trying  to create the psychology of how each of those  
groups might come to the same conclusion in that  same area right and then what we do is we say okay  
we've got this level the 50-day moving average let  the other people let the uneducated people stick  
it in at 30.08 right because that's the number but  we have the predatory algorithms as well as what  
you're talking about who are you and these are  designed to go into these widely watched areas  
run stops flush them out and then jack it  right back higher from failed moves comes  
fast moves often in the opposite direction you  know those those bare traps those little shakeouts  
so again they're a level of interest and what  that means is you know people say hey it's at  
the 50-day moving average that's support we don't  know that until it runs away from the 50-day  
moving average it runs from 30 50 up to 32 then  we can look back and say hey look at that wasn't  
that awesome the 50-day moving average was support  yeah well the next time it's not going to be it's  
going to go through that and it's going to drop  15 20 percent and people are going to say what  
happened the 50-day moving average you know it's  it's support but it didn't work the market's rate  
look at it as a level of interest and what that  simply means is look to the shorter term time  
frames and look for evidence that the buyers are  gaining control and as it comes down after a five  
day decline it probably takes a day to two and  a half days of trading back and forth in that  
band that you said thirty dollars and thirty  dollars to thirty fifty and if it comes up to  
thirty forty eight one day thirty forty seven  then thirty fifty two two and a half days later  
that's where i want to buy i want to buy a  30-52 and maybe the low the first time was 29.95  
then 20 30 and 12 cents maybe i'll stick my bit  my my stop at 30 and 10 cents a couple pennies  
below that most recent relevant high or low so  i so in the short term i have that higher high  
and i want to set my stop under the most recent  relevant high or low because if i have a higher  
high to me it says now the short-term time frame  is looking like a budding uptrend yeah i have  
my higher high what would what would break this  emerging definition of uptrend well if it made a  
lower low so if my most recent relevant higher low  was it what did i say 30 dollars and 12 cents if  
it breaks below that well then i want to get out  of the stock cut my loss i can always get back in  
but maybe it drops down to 28 27 26 etc sure sure  go to the point yeah so it's it's multiple time  
frame align you know analysis and trend alignment  let me uh do this so again as i mentioned earlier  
price volume and time that's the components of  the volume weighted average price time is the  
most subjective because we all have different time  frames i'm a swing trader some people listening  
might be investors some people might be scalpers  which you know they're trading off 30-second  
charts let's say whatever it is that's your time  frame it's not a bad time frame you can't feel bad  
let other people say oh you shouldn't do this  or do that you do whatever works for you so what  
we want to do is say who's in control the buyers  or the sellers or do we have this equilibrium so  
when the demand is greater than supply obviously  what happens prices move higher that's a stage two  
uptrend when we have sideways action it's either  after a rally and it starts to turn sideways  
possibly distribution that bleeds to a decline  or after a decline it accumulates and then leads  
to an uptrend when supply is greater than demand  prices move lower to find enough demand to support  
the prices so when we look at a volume weighted  average price and here this is you know just one  
day and these are i think one minute candles  here this market gapped up this particular  
day so you anchor a volume weighted average  price from the very first minute of the day  
market rallies up pulls back finds buyers who are  defending that volume weighted average price level  
has another rally stays above that v web stays  above it crosses back and forth now we're kind  
of in this equilibrium level it's gone sideways  you know if it broke back above this 360 550  
it would have been a continuation instead it broke  down through this little support in the v web and  
then the sellers took control we had lower highs  and lower lows so for a shorter term day trader  
you know there's a great opportunity here you  know let's say we just shorted it right here  
as this little rally or let's say even right here  at 360 355 let's call it you know with our stop  
just above this little lower high that's a great  little day trade on these two minute candles  
on a bullish time frame what we want to see a a  you know here's a one minute time frame a bullish  
chart will tend to find buyers at the rising  volume weighted average price so if the market is  
above a rising volume weighted average price for  the session i don't want to short it you know some  
people will try to short it up here and cover for  12 cents i'd rather look for it and say i want to  
buy it as it's breaking this range here you know  this tight range buy it right here with a stop  
worst case under here maybe even under this little  low from a very short-term standpoint and again  
the fractal nature of the market says this  could be weekly candles right here there's  
no difference in the analysis the opposite  of true of course on the on the short side  
sure so why is it called anchored uh volume  weighted average price what are we on here  
good question so the traditional volume weighted  average price the one that we hear about the v  
app is for one day the volume weighted average  price is you know was a benchmark for institutions  
to say how well is my order executed i i  run a hedge fund and i give goldman sachs in  
order to buy two hundred thousand to sell two  hundred thousand shares of this stock here uh  
it you know closed the prior day at 177. so  i want to know how well did they do for me  
if if the volume weighted average price at the  end of the day is 170 80 it means the average  
price based on volume every single transaction you  take the average price and divide it by the volume  
the average price it traded at was you  know the the arithmetic mean is 170.95 if  
they came back to me and said hey we sold  your order 166.50 or 168.50 i'd be like man  
you know that's two dollars below the v web you  guys what are you doing you you screwed me over  
but if they you know let's say they executed  the bulk of the order up in here in the morning  
because they knew that it was going to be you  know a lot of pressure or they anticipated  
that and they came back to me and said hey we  filled your order 170 85. 71.85 i'd be like  
you guys are great i'm coming back and giving  you business in the past though before the volume  
weighted average price became a benchmark  in 1988 uh it you know an institution had  
no way of knowing if they were getting robbed by  their broker which they probably were back then  
before we had this transparency so that's why  the v app was invented the anchored volume  
weighted average price is when we set it from  any point other than the beginning of the day  
so we can anchor at the 10 15 low of the day and  we can set our anchor at that 10 15 low it comes  
down starts rallying up we say that looks  like a high volume event at 10 15 a.m i'm  
going to anchor a v web from there and see if the  buyers can maintain troll from that point forward  
and then it rallies up makes a high at 1 15  p.m and backs off you know a half a percent  
i know that was an important high i'll anchor  a v-wap to that and again i'll do that on daily  
charts i'll do that on weekly charts i'll do  it on you know 30 minute time frames so the  
the anchoring bias is you know something that  it's called a heuristic it's uh you know it's  
it's that our decisions are based on you know our  anchor point in our mind so for instance the price  
we pay for a stock we're anchored to that that's  how we determine success or failure in the market  
if i pay thirty 30 and 52 cents and the stock goes  to 33 i know that compared to my cost that's the  
most important price what i paid if instead it's  down at 29 well then i know i'm not doing a great  
job so i'm anchored to that we're all anchored to  a certain you know price so price has memory it  
wiggles into our brain and you know gets  stuck there so it's how we measure our success  
the way to really think about it you know the  the volume weighted average price is dollar  
cost average basically it's the same thing  if you took a thousand dollars each month  
and invested in an apple in this case  you know the stock is trading between 225  
and 197 when i put this together so in the  very first month you bought five five shares  
at a cost of 199.23 that was your thousand dollars  well the next month the stock dropped to 190  
so it was down nine points so we were able to  buy 5.2 shares when the stock was up at 235  
we bought 4.25 shares so at the end of this what  we want to say is here's our volume weighted  
average price our average price was 206.60  that's our cost basis that's our v web  
our volume weighted average price that's the  way to think about it it makes a lot more  
sense when people think about it instead of an  institution buying 500 000 shares or whatever so  
we're anchored to that we want to know you  know some of the guidelines very similar to  
a traditional time-based moving average this is  a cumulative average the volume weighted average  
price takes it from one point forward in in you  know ads and adds up all the volume divide it  
adds up all the prices times the number of shares  divided by the volume so we want to be aware just  
like a 50-day moving average is it rising if it's  rising it means generally we give the benefit of  
the doubt to the buyers if it's declining we give  the benefit of doubt to the sellers if it's flat  
and the prices are going back and forth above and  below it a lot of people will say well that volume  
weighted average price is useless brian it's  just going back and forth above and below it  
that's the beauty of it that that's the value  right there it tells us there's no trend here  
stay away from it wait for it to break the  resistance by that break of the resistance  
set your stop and see if a new trend emerges it's  an alignment with that longer term time frame so  
there's value in recognizing those neutral  periods because it says stay away don't try  
to force the trade when nothing's happening  so is it above or below the v web what's the  
direction of the volume weighted average price  so what we want to know is where to anchor from  
this was a period with you know back in the  fourth quarter of last year for the nasdaq and  
it could be any period you know any time i always  anchor from the beginning of the day i from the  
beginning of the week so this was a monday that  monday you know prices sold off and then the  
next day they got back above the volume weighted  average price for the week so at that point it was  
you know one day plus one 30 minute candle here  so it's not a five day volume weighted average  
price not it's only a five day volume weighted  average price at the end of the week instead it's  
the week to date volume weighted average price  and you can see how the buyers defended that  
and they defended it the next monday morning and  then that next tuesday the sellers took control  
and they maintained control on rallies up to the  volume weighted average price from that monday and  
into the next week they did and then we got back  up above that volume weighted average price so  
this looks more confusing than it actually is  because i added three of them at the same time  
but i'm trying to paint a picture of how they come  together and perhaps i'm doing it in the wrong  
order this was some something i put on uh on  twitter so i put a lot of these on twitter  
and then follow up with and say you know here's  the volume weighted average price from the peak  
amd had this really big rally that you  can't see because i didn't include that here  
but this was the peak and we knew that that  was the peak when it broke down basically  
let's say right here because we had a lower high  and then a lower low at that point so once we  
have that lower high and lower low we anchor a  v-wap off of that peak and say let's see how it  
progresses from this point forward and you can see  three four days later rallied up to that volume  
weighted average price from the peak sellers were  there waiting and they knocked it back down and  
they knocked it back down again over here but then  we saw at the same time when it made this lower  
low it then rallied up and broke these highs and  it looked like okay this is a higher high still  
below that v web but this is a higher high and  that's a an important low so let's anchor a v whap  
off of that so it rallies up it gets back above  the volume weighted average price from the peak  
it was extended on a gap so we anchor one off of  that now the range is really tightening in here  
and i was looking for this as a potential  trade above this peak right here to buy along  
if it had gotten above that level i was planning  on going long with a stop under this low sure  
maybe even that low because that's the most recent  relevant high or low we saw that there were buyers  
defending this volume weighted average price so  if it got above here and then failed to continue  
higher i would want to sell as it breaks back down  instead what happened it broke down so you know  
we didn't take so there was no trade so we  anticipate during these tighty consolidations of  
and we wait for price confirmation it's it's very  tempting to buy in here because hey they've got  
good earnings the analyst said this these guys on  tv said that but until it confirms price wise that  
it's made a high or high it's only a candidate  for trading it's not so we want to you know  
wait until we have that price confirmation this  is something i like to tweet when the market's  
in a downtrend i tweeted it last monday saying  don't buy the dip buy strength after the dip um  
but what we see is you know so here's you know for  instance starbucks starbucks is in this downtrend  
and basically at this point right in here  maybe you know late february early march  
we knew that it was making lower highs and lower  lows so we anchor a v-wap off that peak and people  
say hey starbucks is a good company i'm going to  buy it at 75. that's in a downtrend help yourself  
i want to see it back above this volume weighted  average price i want to know that the average  
participant from this point is now making money  on the long side i want to know the average short  
is losing money and that's what it's really  telling us so it continues lower lower lower  
all the way down to 50 bucks per share so the  people bought at 75 thinking was down too much  
they lost 35 you know 33 percent just a week and a  half later in a so-called quality name instead you  
know don't buy the dip it rallies up it makes a  higher low and then it breaks that volume weighted  
average price by strength after the dip that's  where we want to buy that's where the buyers  
the average participant long from here is making  money at that point the average short is losing  
money so the buyers are back in control we can  buy here with a stop under whatever high or low  
is appropriate for your time frame it rallies  up again it pulls back to the conjunction of  
the volume weighted average price from this  low and this peak right in here i don't buy  
there sometimes you know a lot of people want to  buy it there fine you can do that i want to buy  
it right here as it gets back above this volume  weighted average price and that's flattened out  
so you calculated sorry to interrupt me in the  middle so basically what you do is for every  
new swing high and swing low you have a volume  weighted average price perfectly said gaps or what  
period sorry whatever time frame you're engaged on  okay so you know if if i'm if i'm day trading the  
uh the e-mini i'm gonna do this on one minute time  frames sure i'll look at that low that occurred at  
10 48 a.m and i'll put a volume weighted average  price off that i'll look at the high at 11 18  
a.m and put a view app on that i'll see them come  together in the same exact way so again you ask a  
great question and it's it it it sounds confusing  at times and i that's why i like to use different  
time examples here i like to show an example of a  one minute chart and some swing traders investors  
are going well that's just crazy this is just  crazy day trading stuff it's the same concepts on  
a daily time frame it's the same concept over here  on the right on this 30 minute time frame where we  
do the same exact thing where we see you know from  this peak here and this low the price converges  
energy builds it makes the higher high right here  and we know for a fact at that point that the  
average short from here is losing money we know  for a fact the average long from here factually  
is making money this is supply and demand we have  actual price based evidence you cannot refute  
it so to take it right there rather than wait  for the breakout over here a couple days later  
you know people want to buy this breakout like  i was talking about earlier i want to buy here  
and what happens we know the volume typically will  you know do something like this the volume will be  
you know like this in here and then it'll start  to go like that and then we'll have the biggest  
volume right there and then it pulls back and then  we see the volume like this people are like you  
know here are saying hey look it's breaking out  on big volume i want to get involved and i say  
sure take a third of mine i bought it right here  and then what happens to those breakout buyers ah  
breakouts don't work the algos got me and you know  what they probably did and i sold some to you too  
thank you very much for being uneducated um so  why do you say one third i'm very curious because  
you have repeated this twice thrice so do you  have a staggered way of booking profit as well  
that's a good question i i don't really have  a target on day one i will often look at  
daily r2 you know traditional floor trader pivots  yeah daily r2 is a place where i think i've  
seen some statistics you know 80 percent of the  range is 83 of the range is typically contained  
within daily s2 and daily r2 right and you'll  often see the daily r2 is the exact high of the  
day because there are programs saying 83 of the  time it trades within there let's sell a bunch of  
our stock at that level and it becomes another  self-fulfilling prophecy i add shares there so  
i'll take a third off there i'll also often you  know so that might be right here on that day  
you know just a you know a two dollar gain on 120  stock even though i think hey it's in an uptrend  
i expect that it should at least go to here and  continue higher but then as it breaks to this high  
i'll say listen where does it come from  it's just come from you know 1 1 11 to 120  
it's getting a little bit extended it's up you  know eight percent in five days i'll sell another  
third on the breakout or at least raise my stop  very close in there so that if that so-called  
breakout fails i'm gonna get out of third really  quickly and i would probably have my other stop  
right here and i would have been stopped out of  the balance on that so so a third here a third  
here and a third here and i might have gotten back  in or i might not get back in but i'm okay taking  
the meat of this move and waiting for the  next one sure and you don't add your position  
uh when you are in profit like with  every new breakout you add more positions  
i i don't add on breakouts what i might do is  something you know along the lines of this is that  
if on day one you know i buy right here your  rallies up and let's say this is daily r2  
and i sell my first third and then it comes back  down like this and i have my daily view app is  
right here right and the vwap off the peak is  right there i might add that third back right  
here and set my stop on that third and then as  it rallies like this i'll either set my stop  
under this high or low or something like this  and and you know get stopped out right there  
or i'll sell by the end of the day at least you  know that third that i bought back and hold a  
two-thirds position so i will day trade around  my swing trade position but i'm not you know if  
i buy it here and i sell there i'm not going to  add here i'd never want to buy the breakout i  
want to buy after the pullback no same same story  once we have this compression of range and the  
volume weighted average price off the peak and  the low you know kind of converge that tells me  
this is factually where the buyers are in control  i have the most upside because it's really just  
beginning that trend and i have the least amount  of risk because my stop goes under this level here  
so that's where i have the most bang for my buck  and i can maximize my position because i have a  
uh you know tighter stop relative to the guys who  buy up here if they're using this low as a stop  
they're gonna trade a third the size and have the  same amount of risk i have three times the size  
that they have and i'm taking a third of my risk  off essentially reducing all the risk because now  
if it comes back to break even i'll i'll get  stopped out at that break even but if i took  
a dollar profit on a third of it i'll still  make 33 cents average on the full position  
yeah yeah fair point got it okay so again  buying the dip i don't want to be labor that  
point over and over again you know we so as  you just observed and i should have labeled  
it on there is that you know from swing highs  and swing lows regardless of the time frame  
from earnings so you know here this  company reported earnings that gapped lower  
but look what happened the buyers came in  after a couple days and we took control  
now you know people will sell that you know say  hey my target is the you know gap closure fine um  
but then again they had another earnings report  and another earnings report so it you know once  
it gaps here we anchor another volume weighted  average price and look at how well that was  
defended we had a little shakeout prior to the  next earnings report and then you know this was  
the next earnings report so we anchor a v-app off  of that and look where the buyers showed up again  
so from this one you know buyers took control it  didn't pull back all the way but it maintained  
above that we had a new momentum event once again  earnings buyers defending it over and over again  
showing that this is how institutions buy they  say i like that i like the earnings report  
let's buy 5 million shares between now and the  next quarter's earnings report and we want to buy  
5 million shares so we're going to space it out  and anytime it gets down to v web since that event  
we're going to be in there with strong bids that's  what's happening they're trying to absorb as many  
shares as they can because that's their fair  value since that event we're anchored here  
we're not anchored to the beginning of day  we chose that then we could anchor one here  
and it would look like this right and we could  anchor one here and it would look like this so we  
want to be a buyer there if we missed it somewhere  over here it would look like this and this it  
would look like this and you know this time it  gapped and again you know we anchor it there  
buyers came in and defended it so they're  great for using it as stops as well  
when it tests that volume weighted average price  is what i call the handoff we we then say okay it  
tested that successfully then prices pushed higher  so if i am a buyer here this was an important high  
or low maybe i'm going to set my stops underneath  this rising volume weighted average price  
so it's a it's a really versatile tool  to use for entries for stops for exits um  
it's dynamic support and resistance it's  not just horizontal support resistance  
so from this low in you know january of whatever  this stock is you know buyers emerged each of  
these times it wasn't perfect but this is a level  of interest and when we see that level of interest  
we look at it on shorter term time frames for  the evidence and maybe we buy it right here or  
maybe we buy it right here we buy it right here  with our stop under there we buy it right here  
we're not buying it i'm not buying it at least  right on the touch i want to buy as it says yes  
that was support because we moved away from it and  now if it breaks below that then i'm going to stop  
out and then the v wap starts to turn sideways it  breaks down it fine now instead of being support  
it became resistance there so if you want to flip  to the short side great but you certainly have no  
business still holding it long plus it's traced  out at you know head and shoulders pattern as well  
this being the neckline so you've got to  tie it all together for the most chance of  
success and that you know comes with decades of  experience where you can just see that happen  
um but like any form of you know vivic of support  or resistance the more times it's tested what's  
you know what's happening more likely it is  to fail it's not bouncing with as much vigor  
as it had in the prior ones it's just kind of  running out of steam here and then it closes  
below it and then it starts to make a lower low  that's a clear sign get out because now the the  
direction of the view app also from that event  that was pivotal to your entry is declining so  
getting out right in here and avoiding this  mess is huge it tells you that it went from  
a period of buyers in control kind of neutral  so stage two stage three stage four decline  
and we use that as a reference point then we can  draw a v-wap off of here and you know v-wap off  
of here will look like this and then we can you  know do the same thing over and over again we  
can draw one off of uh you know off of here and  it'll look like this we can draw one off of there  
it'll look like that off of here look you know  so over and over again is what we want to do  
um uh just one question try to entropy in the  middle yeah no this analysis obviously you  
can't do in the entire stock universe so you will  obviously select your stocks that okay this is my  
number of stocks which i am going to follow and  i'm going to only trade on them because i've been  
following them for a long time is that your model  or you scan all the stocks of u.s markets and see  
which one is satisfying your pattern and then you  use that stock yeah so i you know i again i've  
been doing it a long time so i have my process  personally is i do all my scanning manually  
as i mentioned earlier you know when i when  i click a symbol and then i just arrow down  
on my list it populates the weekly the daily the  65 30 15 five minute and two minute time frames  
i i'll jot down notes you know on a piece of  paper okay and then i'll put little marks next  
to them and that becomes my list for the next day  and i'm not necessarily looking for longs and i'm  
not looking for shorts so i don't want to go into  it with a bias that says hey the market you know  
turned around today i'm going to look for lungs  maybe some stocks are still shorts i don't know  
let's see what each stock i like to trade each  stock on its own merits so aware that the fed is  
report you know is is got a meeting this week  and they're going to announce on wednesday so  
i don't really want to and i don't have any  swing trades on now i'm most likely you know  
maybe i'll hold something overnight tomorrow but  i'll most likely sell them before the fed event  
on wednesday i have to be aware of the different  market conditions we're in we're in a period of  
heightened uncertainty and a lot of volatility so  i need to shrink my time frame so i'm just looking  
for opportunity and right now on shorter time  frames so you know as all these stocks are kind of  
broken at this point um and you know they're down  too much too short or they've you know rallied too  
much late in the day to become a low risk entry  point for tomorrow i'll start looking at their  
shortest time frames and you know start out as as  a scalp trade and then if that you know continues  
to hold the v web that i was looking at from you  know tomorrow morning's 10 48 lower whatever it  
might be then maybe i turn it into a two-hour  trade a three-hour trade and if it continues to  
do well throughout the day i'll sell pieces of it  and maybe i'll hold a little piece overnight if i  
you know perceive that that that's the right  thing to do based on the market you know the  
way it trade it you know ended the day and that  sort of thing sure so well you know my question  
was that when you're doing this manual scanning so  yes i mean you can't scan thousand stocks right so  
in manual scanning obviously you have your  own stock universe right so do you follow that  
that i will scan these 100 or 200 stocks and i'll  only trade in those number of stocks which i have  
yeah so my process is on on the weekends i  look at what i call my master list of stocks  
and that is a little bit over a thousand stocks  and and i look at each one of those and it sounds  
like a lot of work but i can do it in about if  i'm really focused i can do it in about 90 minutes  
um if i'm kind of screwing around looking at  emails and pulling up stuff on youtube then you  
know maybe it's three hours yeah but but the goal  of that session on on the weekend is to get a list  
for the next week and that'll typically be about  200 stocks okay now of those 200 stocks i know  
i'm not going to trade probably 170 of them i  might trade 30 of them over the course of the week  
but i there's stocks on there i want to just keep  an eye on because i know the banks have reported  
i want to see how they continue to are they  going to continue to decline the way they have  
the way jp morgan you know had got smashed off of  earnings last week and has been obliterated since  
i want to have some energy names in there  because energy names are strong even though  
i don't trade energy names i want to look at  some of the key i you know key uh uh tech names  
even though i might not trade google i want to be  aware of it because it's important to the market  
but i'll get my list down to each so so that  200 i look at each and every day so on sunday  
i look at it and say here's the 20 or so i want to  really look at tomorrow but of that 20 i'm setting  
alerts on maybe 14 of those stocks and on five of  those stocks i consider them my a to b list ideas  
the ones i really want to focus on because they're  curled up really tight within a range and if they  
go i know i can get bigger share size they're  in a favorable group is what i'm thinking maybe  
um the it's got the volume the range is tightened  there's pinching between a couple of important  
volume weighted average price levels they just  have the look you know they're they're they held  
on the rising 20-day moving average after a 61.8  percent retracement of the prior range the group  
is hot um you know all those things become very  small deciders in what becomes my real focus list  
so again i'll set maybe 15 alerts and going  back to our earlier example of the stock that  
breaks above 30 and 50 cents i want to buy  it above 30 50. what i'll do is i'll send if  
it closed you know yes if it closes today  at 30 27 i'll set an alert maybe at 30.42
so if i'm not watching it carefully  it reminds me to take a look at it  
it looks like nothing's happening  i'll reset that alert for 30.47  
10 minutes later i've kind of forgotten about  it it's done nothing 3047 i look at it i put it  
on the level two oh i got to pay attention here  it looks ready to go in fact boom let's clear  
these offers let's get this thing going because i  saw that you know so i saw that applied materials  
and ada adm are going amd are going and you know  this little 30 dollar semiconductor if i give it  
that nudge other people are going to notice and  they're going to get into involved here too so  
it's just kind of all those things coming together  and of course you know there's there's ones that  
i i want to anticipate too my analysis a lot of  times look is you know i hear of these 20 stocks  
i know 10 of them aren't ready today but i want to  start to see how they develop during the course of  
today because if they come down and touch that  five-day moving average and make a higher low  
and it comes down between that v-wap off the peak  three four days ago and puts in a higher low then  
maybe it's a good idea for tomorrow or so i just  want to start to get more familiar with them so  
i'm not just pulling up symbols i've never seen um  you know so there's there's a pretty core stable  
in that 200 and by looking at them each and every  day i get a better feel for what's happening under  
the market than just by looking at the s p or just  looking at the nasdaq because i have energy names  
i have you know uh bank names i have tech names i  have gold names in there i want it and i start and  
i i look down on my list and say i've got three  gold names here i haven't seen three gold names in  
three years what's going on with gold so you know  they'll often lead the gdx so i'll look at the gdx  
and say i could see how that could get going if  these three stocks which appear to be the leaders  
do break out and continue to move higher i could  see why other people will be attracted to this  
group so i feel like i get a head start by doing  it manually rather than you know putting in scans  
and saying here's the cookie cutter pattern  i'm looking for now market fulfill my order  
i want to listen to the market rather than tell  the market what i want sure sure great answer  
thank you okay so we've covered um as you pointed  out you know from swing highs and swing lows  
uh from the beginning of the day week  to day month today year to date and it's  
not like i'm looking at every single one of  these on all stocks but if it happens to be  
relevant especially now we're january 24th  we've got about 18 days of trading i think  
so i'm looking at basically the 18-day v-wap the  year-to-date v-wap is important because that's an  
important benchmark that people are measured  against you you know we start our scorecard  
at zero on january 1st right you your your fund  managers and how they get paid in that um so  
again we've covered you know week to day daily the  sec the second day volume weight at average price  
from earnings from gaps um and from ipos ipos are  really one of the cleanest ways to look at the  
volume weighted average price because we have a  defined starting point for everyone it's it's the  
same for everyone unless you got shares on the ipo  itself the after you know the the actual trading  
in the in the once the market opens everybody's on  the same page we know that it opened at you know  
whatever this is 45.63 so what i'll do and you can  see here i have two different colored v-laps i've  
got this blue one and i've got this purple one the  purple one is to the very first candle of the day  
okay and this is a one minute chart and what we  see there is the biggest volume typically that  
that's typically the biggest volume for the next  couple months on a one minute candle because the  
people who got it on the ipo are flipping it out  maybe to the market orders so this is a negotiated  
transaction here it's not real supply and demand  after it begins trading so i put vwap on that  
first minute but this is where the actual trading  begins on the second minute so i'll put one on the  
second minute as well and you can see here that  that's where it pulled back precisely to it didn't  
pull back to the v web from the ipo but from  the second minute and then you know the next day  
you see that now we're on a we're on a five minute  chart so just from the five minute candle is fine  
here's day one this is day two the third day look  at where it opens right on that v web from the ipo  
it rallies up and and again we could put a v web  off of that low and it would look like this and  
off of that high right there and there's your buy  with your worst case stop under here or maybe even  
under this little low right there that high or low  and we get a phenomenal rally from 64 up to 68 and  
back up to 71.72 and then we see lower highs and  lower lows and this v wap will look like this  
and then we'll put one off of here we can put  one off of here etc and you know we want to  
buy these consolidations you know breaks of  consolidation um here's a couple other ipos  
not really as important we're you know we're  running an hour and 20 minutes here so i want to  
you know keep it a little concise but you know  even a year later six months later the v web from  
the ipo you'll see often is defended and over and  over again until we see that roll reverse where  
it breaks down hard on a gap it tries to bounce  there fails gets stuck under it and then test it  
now the average participant the average short is  defending it the average long is saying oh boy  
you know it makes the lower low  there if that's not as clear as  
that can be signaled to get out and avoid it  i don't know what else is and you can say well  
sure that's traditional support and it is but  here we know the actual price actual average  
price factual you cannot you know you can't argue  that that's not it the the actual price that is so  
let's sum it up where do we anchor from  breakouts and breakdowns federal reserve  
so we'll see that on wednesday at 2 p.m eastern  when the federal reserve announces the s p will  
look like this in the morning and it'll kind of go  flat line and then the fed this will be 2 o'clock  
the fed will announce and it'll go like this  and then it'll either go like that mm-hmm with  
the v-wap underneath or it'll you know get the  snot kicked out of it and stay below the v-web  
anchored from that 2pm event so fda reports you  know when pfizer gets a new vaccine approved  
is it worth buying on that gap up because it  fails and continues lower we were like hey  
what happened who cares what happens they're  sellers don't try to buy it don't fight it  
i like to use it for short squeezes to identify  where the shorts are positions what's the average  
short price approximately where will they feel  paying so if i can see that the short interest  
went from 3 million shares to 4 million shares 8  million shares in the last uh eight weeks i can  
look at the v web from the last eight weeks and  say the v web from the last eight weeks was 28.75  
the stock is at 30 and 45 cents and it's about  to break out well those those eight eight million  
five million shares that were added are definitely  feeling pain because the v web from the time they  
added was 28.75 so we know that they're going  to feel more pain and possibly uh uh you know go  
in and cover the open of the trading day that's  simply the the v wap the the only difference is  
and i use the term sometimes interchangeably and  people say brian do you mean the anchored view app  
right right i'll say the v web from the gap so  the v web anchored to the day that it gapped  
from an earnings report it might have caused  a gap or just a regular breakaway gap because  
there's you know the technical events um year to  date week to date month to date any significant  
event that changes the supply and demand dynamic  highs lows big volume candles often are a good one  
it's just the easiest quickest way to say  factually who's in control the buyers or sellers  
and i think that's my last slide except for  this don't forget we have all these cool little  
indicators and oscillators but there's only  one thing that matters price only price pays  
i have to include that on every presentation  because i say it a thousand times a year it's  
the only thing that matters don't argue with  price it's the only thing that matters so  
here's what i do i've got to do a two you know  30 second pitch my book is on amazon it's been  
called one of the top 10 ever written look at you  know my work on on twitter if you're interested in  
my subscription service send me an email at this  address and i'll give you a good deal and that's  
that's all i have here my goodness and i'm just  wondering why i haven't met you earlier because  
you would have shaped my trading career quite  differently i'm sure for good thank you so much  
brian it was such a pleasure talking to you i'm  waiting for this book and i'm really waiting for  
the next one which is going to uh come very soon  what's the timeline when is the next book coming  
oh man you know i'm not a natural writer vivek i  i've been i i started the first words of this book  
probably two years ago and i wrote for about  a month and then i put it down for six months  
i got motivated i wrote for a little while put  it down for eight months now i'm on a good i  
so the short answer is i hope i have it written uh  april-ish in in print by june july let's see you  
know okay fingers crossed we are eagerly for it  and brian you have given it all to all of us thank  
you so much really really it has blown my mind it  has given me so much and i'm going to start using  
anchor rev from today itself because yesterday was  an important day a lot of absolutely so this is a  
great time to experiment this particular utility  brian thank you so much uh it's it's an absolute  
pleasure to interact with you great thank you  for having me on thank you so much and friends uh  
brian's book uh is there the link has been given  to you use it because you don't get it uh think  
so easily the way brian has given to us thank you  brian have a good life ahead and we'll be in touch  
through twitter thank you okay and people watching  the indian markets uh because we have really good  
volatility to play on as well you may not like to  trade but it's a good market to observe i don't  
want to trade all night you know you guys are just  opening right now it's it's 9 30 local time 9 30  
at night itself yeah yes yes yes all right thank  you thank you take care please thank you okay bye
you