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The AVWAP Trading Indicator | Secrets and Setups | Brian Shannon_ CMT

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welcome back to the treyland podcast I'm

your host Richard moglen joining me

today is one of my favorite traders to

talk to Brian Shannon who is very

experienced he's also the founder of

alphatrends.net and he just released a

new excellent trading book all about

anchor V web which is really our Focus

today so Brian thank you so much for

coming on and uh yeah great to have you

back on the podcast I've been looking

forward to this one Richard uh you've

always got great questions and really do

a great job researching the subject

before so yeah let's do it yeah perfect

and uh to Dive Right In I think it'd be

good to you know hear about your history

with v-wap and anchored V web

um how you first you know uh became

aware of that indicator and how you've

kind of adopted it and kind of centered

your strategy a little bit uh

surrounding that so I'd love to just

kind of hear about you know that

backstory and and how you've you know

developed Mastery of it okay so I I

first became aware of the V web in 2003

I was using a software called so 20

years ago

um real Tech and Realtek had this uh V

web for one day which is what it was

traditionally designed to do but I

realized after using it for a little

while that I could do it you know if I

change the time frame it would allow me

to look at you know five days or 30 days

or 18 days and I started kind of

experimenting I actually started

experimenting with a I had a uh a trend

tool just like any software you see or

uh normal Trend tool where you draw you

know lows or highs and or whatever it is

you're trying to draw a straight line

with well they had a v-wap trend line

it's like what the heck is this so I

drew it kind of like horizontally and I

noticed it would move up and down and

what it was doing was actually showing

that last point was the actual view app

for the beginning so I I started to

notice that and see that you know there

was support and resistance there and I

couldn't figure out why so then I

started using the the other tool on the

chart and realizing that hey there's

some value here when I look at it from

earnings reports or from two days ago or

from this big move so you know fast

forward I think about 2008 I wrote an

article for

uh tradingmarkets.com called uh chase

the gap or wait for v-wap and that's one

that I've you know still a strategy I

use today that you know a stock gaps up

and you look at it you know do we chase

the stock what do we do it's so hard to

know when to get involved in that stock

so I just let it settle down a little

bit if it gets back above the daily V

web and it's not too far extended by

there with a stop below the low of the

day that got a lot of attention 2015

tc2000 uh got a hold me and said hey

would you like to use our software we

like what you're doing and this sort of

thing I said if you can build a

point-and-click anchor tool I'm yours

done about two weeks later said Brian we

got it we're going to call it the

anchored V web by Alpha Trends and you

know there it is today I've been you

know posting charts about it for the

last 17 years and now we've got uh you

know so many other platforms tradingview

has it

uh Trend Strider has it

um each each trade charts I think has it

Fidelity charts so it's really becoming

more of a mainstream uh technical tool I

didn't invent it I've just kind of you

know help Shine the light on it

yeah perfect and you know take it a step

back for people who aren't familiar with

it at all uh what is V web and anchor V

web or AV web stand for I kind of give

it away there

um but what does that stand for and also

how how would you go about calculating

okay so the v-wap itself the volume

weighted average price

it was invented in two I'm sorry 1988 as

a tool uh for institutions to to

Benchmark their executions that a broker

would do for them so what it is is

basically the dollar cost average of

every single trade during that day so

every share one share one vote it's not

you know weighted by time it's the

actual you know truth in price so it

says you know if the stock traded

between 24 and 26 uh and closes at 20 it

closed at 25 well maybe most the volume

occurred you know near the high of the

day so the V web for the day is 25 and a

half and if you got a execution better

than 25 and a half it means that you did

better than the average participant and

it's kind of been known as uh the price

on naive Trader could expect to get

that's what the original authors

basically said

um a few years after that I believe it

was 1993 Paul Levine who has deceased

since then he's a math who started you

know tinkering with this and he kind of

invented the anchored v-wap as far as I

can tell that's he's you know I dug far

and wide to find what the history was

um so he in you know kind of invented it

and then his work kind of died off a

little bit and I like I said picked up

after that so the anchoring part is

simply as you suggest as uh mentioned

it's you know the traditional view app

is for one day and one day only the

anchored view app says from this

earnings report eight days ago from the

beginning of the year or whatever

Catalyst or event you want to measure

the the true price the true average

price that allows you to set it to that

point and then it tells you from there

who's in control buyers or sellers are

they gaining control are they losing

control are we oscillating above and

below that view of that anchored V web

so now it's you know become uh instead

of just an execution tool which is still

used very heavily as in fact it's the

most common uh input into the algorithms

according to

um Ken Griffin which Ken Griffin Citadel

is the um I know you know this is the

largest uh market-making firm in the

world and Ken Griffin you know told this

to Congress a couple years ago with a

GameStop thing and said you know we do

35 of all business in the market every

35 percent of all orders touch our hands

the majority of those are done with uh

the anchored view with it with a volume

weighted average price order and he went

on to say it's not just for one day it

could be a week it could be a month and

you know that was a real important thing

I mean that's when it really made so

much sense to me in that trial I mean or

that hearing whatever it was

um and here's the guy you know he made

more money than anyone in the hedge fund

business last year he took in 4.1

billion dollars in one year highest

earner ever you gotta listen when a guy

like that talks and says this is what

we're doing so now it's you know a huge

piece of algorithmic orders and what it

allows us to do is look at it and say

you know where are those buyers or

sellers stepping up defending price

levels and it's a level of interest to

you know look at the stock a little bit

closer and see if there's evidence there

for to suggest maybe it's a trade or not

yeah perfect and

um I I've I've talked with you of course

about this before previously uh you one

aspect that really stuck out to me

previously is you talk about how it

combines price volume and time all

together takes all those into account

um and there's a few different ways to

calculate the price component of uh the

anchor V web there's like open high low

close divide by three what what's kind

of the actual method that you use for

for the for the different time frames to

to calculate uh that's a great question

I get it all the time and I actually

wish that these trading softwares

wouldn't allow anything other than open

high low close divided by four that's

you know so so the V web is every single

transaction is what were the true V web

is and in order to get the true V web

you have to use a tick chart which

averages every single trade that's just

not practical looking at tick charts

especially if you're looking for more

than a day or sometimes in the really

big ones you know for an hour or so

because there's just so much data

scrunched up in there so what we want is

we want the most inclusive data we're

not trying to look at the average from

the highest point ever we're trying to

look at this it's basically represents

the psychology the participants it is in

my mind it's the best sentiment

indicator because it's actual truth it's

not this the sentiment in you know polls

it says what do you think well I'm

bullish but you know I'm 20 short uh you

know they there's there's what people

say and then what they do with their

money and this allows us to look again

with 100 accuracy what they are actually

doing on balance it's not just the

person who you know someone argued with

me the other day saying well I anchor it

to the high because I want to know the

program that turned on at that high it's

not like someone just turned on a

program at the high it gets you know it

just shows that there's a lack of

understanding so the point is if you

have high low and close well you're

taking out the average of the open if

the open is one of the most liquid

periods of the day same with the clothes

and everything in between every share

gets an equal count it's not a Time base

it's time volume and price and that

makes it Superior to any simple or

exponential moving average but you know

there's still room for those as well as

as we'll probably delve into

yeah and that was a question I asked

people if they had any questions for you

on Twitter and there were a few that

were saying uh you know you also include

uh the five five day moving average into

your uh process also the 50 day you talk

about that in your book you know it's a

key level of interest because a lot of

Market participants have it on their

charts that's why it's significant it's

a little bit of a self-fulfilling

prophecy uh so actually let's go ahead

and touch on that uh how do you

incorporate

um those different indicators along with

anchor view app to you know bring it all

together and make the final package

which is kind of how you look at and

interpret different charts yeah you know

Richard I think that all analysis in my

mind I I never look at and say hey it's

at the view app so I have to buy I never

look at and say the earnings are strong

so I have to buy I I look at it and say

in and same thing with a 50-day moving

average or a two-thirds retracement

those are all just little breadcrumbs

that lead us into the direction to say

how does this all add up does it come

together and reveal what the crowd is

actually doing so I don't place you know

100 emphasis on anything I have you know

clearly you know the five-day moving

average for me is what I've said you

know consistently is my most important

intermediate term Trend indicator if the

five-day moving average is declining I'm

not going to buy that market or that

stock if it's advancing I'm not going to

short that stock or that market so what

we're trying to do is to understand the

psychology of what drives the

participants you know I've done this

before I ask people hey do you have how

many people in this room of a room of

100 people have a 50-day moving average

on their chart you know 99 of the people

will raise their hand and and then I'll

say well why do you have it there well

because it works well because you know I

read about it in IBD or whatever and

it's but no one could tell there's no

real reason why it works right it works

because as you alluded to just before

it's a self-fulfilling or self uh you

know self-fulfilling prophecy to a

degree that if enough people believe a

pullback to the 50-day moving average is

going to be a place where it finds

support what happens will sellers start

to slow down their sales as it gets

towards that level buyers come in off

the sidelines and say hey it's at the

50-day moving average I'm going to buy

some I'm going to look at that 50-day

moving average or that anchored view app

or that 61.8 percent retracement and say

Hey you know it pulled back to this

level and this is also the anchored V

web from 22 days ago when the company

reported earnings and I looked at those

earnings and they were great they had

big Revenue increase they had a big

earnings increase so it tells me that

who's going to buy here well most likely

fund managers growth fund managers

they're interested in this they so I I

I'm not interested so much that hey I

think it's a great company because the

revenue and earnings are good I don't

want to get my opinion in the way I'm

trying to understand the psychology of

the fundamental people the 50-day move

moving average people to Fibonacci

people the Sunspot people if that's a

thing and the volume weighted average

price so how does it all come together

it's all about psychology of that area

and then when we get to that level and

we say this is an important level you

can choose to buy there if you like I

personally don't because it might just

continue to go lower it might be a

motivated seller we just don't know

about so instead to me it's time to

drill down to Shorter term time frame

and look for the evidence so it might

have pulled back you know four days in a

row that five-day moving average is

still declining but it's touching on the

50-day moving average or the 21 or the

21 EMA it doesn't matter they're all

kind of going to be in that same general

area and tell us it's a level of

Interest so study closer and that's

where I start to stock the trade it's

not just about boom take action it's

about okay now let's drill down so I can

get the stock as it begins to Rally

again I want to latch on to that

emerging momentum I don't want to buy by

the breakout from where it was eight

days ago because it has to go ten

percent to move there and I'm chasing so

I want to catch it as it comes off that

stage one on the short term time frame

right and then I can manage my risk uh

you know very effectively and that

allows me to have much bigger share size

at the onset of the momentum

yeah perfect uh you touched on a lot of

Concepts there that I think we'll dive

deeper into and I think the best way to

talk through this is actually to bring

up some charts and you know uh look at

it live because it's such a visual thing

so if you wouldn't mind go ahead and

share your screen and maybe once you

brought that up uh the first thing is

just to kind of talk through your your

overall layout so people get get a sense

of you know what you're looking at on a

day-to-day basis uh just so if they've

got that that frame of reference yeah so

what you see here I share this on uh

Twitter a lot these these charts and I

do my videos with this so I've just got

on the left I've got a daily chart and I

have a that red right here is a 20-day

moving average that blue is a 50 and the

black is a 200-day moving average over

on the right you can see I've been

drawing here

um I've got a 30 minute time frame and

that's the five day moving average right

here that orange one so what I'm looking

at Richard is you know I've got a couple

anchor View apps too so this is Sienna

and Sienna made a high in 2022 that

might have been late 21 I don't know and

it found resistance at sorry anchor of V

web from that it found Supply right

there it found Supply found Supply found

Supply again again and again well that

orange line is also the covet anchored

view app so they're kind of coming

together in that same area now I look at

this and I say let's just kind of clear

all this stuff off let me uh the

camera's in the way

um so that dark blue line is the

year-to-date anchored V web what I can

also do is say you know are the buyers

in control from this low in October or

from this low and we're above those so I

look at this and I see you know we've

got a 20-day moving average above a

50-day moving average above a 200-day

moving average

what's important about that to me is I

know that that's in a requirement for

some institutions that they're only

allowed to buy if the 250 is above the

200. it's written into their bylaws so

now you know we've had the stage four

decline the lower highs and lower lows

that were that were very clear over here

lower highs lower lows then we had a

higher low and we had a higher high but

at that point the 200-day moving average

was still declining so I wasn't trusting

it so the 200-day moving average is

flattened out this tells me we're in

stage one three basically doing this

sets it into a stage 2-1 now I wouldn't

have purchased here when it got above

that because look at that big gap and

you know it was just a couple days ago

it was 46 and a half and you know the

people who bought there you know it was

good for a day but then it just got

crushed they reported earnings the other

day they had what's looking like a

ShakeOut to me so if you look at the

anchor from that place so what I'm

trying what we're doing here of course

is building a picture on multiple time

frames we know there was a catalyst that

Catalyst immediately got bought up

because we can see let me just get rid

of this one so we can see that's the

average the the anchored viewf from that

low and it's telling us that since that

occurred the buyers came in very quickly

and it may you know ran up here it

pulled back and made this low at 50.75.

well it got back up to that level again

and it pulled back to 51. so the higher

low tells me the buyers weren't waiting

for it to pull back to 49 again or to 50

or to 50 75 the buyer said you know we

got to get involved in this thing on the

open tomorrow morning if an app opens

lower so they defended at 51. so now

we're building we know this is the level

of Interest so I'm starting to build a

trade plan and say we've seen some

resistance in here recently so for

whatever reason there's a seller there

let's look at the anchor from this Gap

and we're above that and from this high

so that confirms that from the average

of this Gap this Gap the average

participant long is in a winning

position the average short seller is

losing money so we want to be on that

that team so now if it breaks it got a

nice A little pullback here this

afternoon tomorrow we get rid of this

data so that means this will be we'll be

averaging this out and that means as

soon as the Market opens even if the

Market opens down here that five-day

moving average is going to start to to

advance because we're getting rid of

this data so what I want to look for is

I want to buy the higher high above a

flat to Rising five-day moving average

because it's in alignment with what we

see on this longer term picture and

Sienna who knows maybe it's going to

break out and then just completely fall

apart we we don't know this is the

tricky part of stage analysis in six

months if it's up here and it's done

this we can say what a beautiful stage

you know two breakout that was but right

now we're at that part where nobody

knows what's next it's that lonely

feeling of buying right here and saying

wait a minute where's the volume I'm

going to wait for the volume I'm going

to wait for it to break Above This level

well guess what as it gets above that

level it's extended and I'm going to

sell some to you and look for the next

pullback and get long on this move so if

I want to buy here I'm going to use this

shorter term time frame to say well if

this is a new emerging uptrend on the

shorter term time frame that's

going into a larger uptrend on The Daily

time frame I could be at the very

beginning of maybe a multi-year run I

don't know but I do know this that if I

buy right here at the point where it

makes that higher high what is my point

of exit if I'm wrong you know this is

great analysis and you can say you know

and maybe it just maybe it's going to

fall apart you can say well the V web

doesn't work well whatever nothing works

all the time that's not the point

what we have to do of course is risk

management and say based on my debt the

definition of not my definition the

definition of trend higher highs and

higher lows if I buy here there's only

one place in my mind that makes sense

for a stop and that's right under here

because that is the most recent and

relevant higher low

that emerge so if we're truly going to

you know see this stock let's just you

know make it look like this and move

this over a little bit if it does

something like this and I'd buy it here

and it goes like this and maybe I sell a

third and then it does this I might get

out of another third there and probably

just the rest of it here truthfully but

if it breaks down below here well what

happened to my definition of trend it

doesn't exist so if I'm a trend Trader

why on Earth would I still hold this

stock it doesn't make any sense what my

hope instead would be is that I buy that

break right above here and I sell a

third and maybe it goes a little it

pulls back and does this maybe I'll even

buy back that third there and you know

then raise my stop under here once it

eclipses this high I'll say that's the

new high or low so then if it does this

and rallies well then again I'll raise

my stop under here and though that's the

definition of trend I'm not looking for

a price target of 62 or whatever I'm

looking for this and if the market does

that that's where I get stopped out so

if I'm in here and I'm out of the final

third here I'm out of a third at this

point that's what the market told me for

my time frame

yeah perfect you touched on a lot of

great stuff there and coming back to one

thing you said about not buying on that

that large move up previously uh you

mentioned this your book as well it's

expended a lot of energy to get to that

point already you're looking yeah for it

to set up in a large term time frame

have that consolidation that then it can

have that that rapid advance from which

if you can get a precise entry you can

immediately hopefully be at a profit and

then you've got options you can sell to

strength you can manage risk tighter at

that next relevant higher low

um all those things that as you

mentioned and uh you know exactly it's a

key theme in your book too that you talk

about the risk management aspects you

know pretty much at the end of every

chapter you know why why is that so

important it's because we want to limit

losses

um as you mentioned you mentioned

already so many times

yeah so you know here's where I wouldn't

buy this stock if it gapped lower that

day and then broke out on here there's

no way I would buy it there and and

maybe it goes and I miss a trade and you

know what I've missed a lot of them but

what I would think would happen is it

breaks higher like this then it pulls

back a little ShakeOut does this and

then I always want to see a tightening

of the range because the tighter that

range gets I know I can maybe put half

of my stop below here put the rest of my

stop there once I sell a little bit I'll

raise my stop up under here completely

and just let the market tell me whether

it's working or not I've got a third

left of isee I bought that one at 27 the

other day and this is this is where my

stops are I mean this is you know I this

is I've got one third left and because

it's extended my stop currently is at 28

uh 50 uh 28.40 per share so you know

maybe it continues to go higher but it's

had a huge run I get defensive when

they're up this much like this I want to

lock in gains I don't want to be there

um you know there was one uh so let me

just make a quick example of that cute

I was in Cube

and bought it over here it doesn't look

like much let me just change the scaling

so we can see it a little bit more

clearly

um so I you know I bought it over here

at uh 47.70 I took a third off the first

day at with a 55 cent gain then I got

stopped out of uh part yesterday at

48.59 and the reason I raised it on that

third so tight is that it broke out

and look at where it had come from look

at the last time it broke out you know

and it was extended well those breakouts

from extended levels so I sold a third

55 cents a third 89 cents and then guess

what you know and look what happened

today a gap down so I got rid of the

last third with a loss of where's my

notes

I know it was very small oh 54 cents so

what I do when I when I when I get

stopped out like that I go uh I'm sorry

when my stop gets hit prior to the uh

you know if it gaps through my stop my

stop was

4806 so it opened below the Gap so I

wait for the first five minutes because

oftentimes we see so this is a five

minute candle oftentimes we see it we'll

do this right but instead I say if it

breaks below the five minute load that's

where I get out so I got out at

47.17 I believe and lost 54 cents on

that but because of the prior two thirds

that I took off profitably I made 30

cents a share on average which you know

buying it at 47.70 I'd be down 90 cents

instead right now so it's not my problem

anymore it's uh you know you got to take

especially in this market you got to

take them quick it's just they just

don't hold

for sure and and coming back to v-wop um

first kind of you know just talking on a

daily basis what does it indicate to you

when a stock trends all day above that

daily view up and also on the flip side

if it's trending below that all day

um yeah I'm curious to hear your

thoughts on that yeah motivated buyer um

I mean that's the only real way that I

can you know look at it and let's just

uh get rid of some of these so let's put

this on the Spy you know today and put

never mind those two purple and blue

ones but you know we kind of did that

today we gapped up and this is what we

often see is it chops around you know

after that but then it breaks that

opening range and then it's Off to the

Races and you can see that you know

throughout the day it was higher highs

and higher lows above that volume

weighted average price so as a very

short-term Trader if I was looking to

you know get involved in this I would

either want to buy it right here or I

would want to buy after these pullbacks

acts and I you know so I even on this

chart which is one minute I would put a

v web here for instance and say okay

well we pulled back from that little

break of that range it pulled back the

buyers regained control right here so I

can enter as a day trade right there at

40. 410 90 or whatever it is and my stop

would go under here and then look at how

that v-wap held as support there so

we'll pull back down that would tell me

well I want to put my stop under there

and maybe I'll set a new anchor there

and look at how that happened how that

handoff occurred and then that touched

it over here later in the day so what

those handouts allow us to do is to say

you know I my stop is under there now

this is my new high or low once it does

this my stop goes underneath that level

and now we've got another shift in

momentum higher so as long as you know

for my short-term day trade as long as

it's above this V web I'm going to

continue to hold out till here till the

end of the day and exit very close to

the high whereas I might have purchased

it right here or maybe even purchased it

right here but that's still good you

know for a day trade for a Dollar Plus

yeah and we're talking day trading here

but the same Concepts apply on higher

time frames right uh yeah exactly yeah

and and you know sometimes people when I

show a one minute chart they're like

whoa whoa hey I'm not a day trader

that's not the point the point is with

technical analysis all of the

information works exactly the same so

when you look at for instance a gap up

like this and it goes sideways for 40

minutes today it's very similar to

um newer these guys reported earnings

um not too long ago about a month and a

half ago and what do we see we see some

choppy action around that so again do we

want to buy just because it's above the

V web well look at where it had come

from the last couple days so do we want

to buy Above the Wii app here no it's

extended but now what I like about this

stock is we have this low we have a

higher low we have a higher low we have

this level of resistance and now it's

starting to tighten up if it breaks

Above This high I can get involved with

a stop under here rather than if I buy

here where does my stop go way under

here no thanks and then I have to write

it down like this so you know maybe you

know someone with a even a longer term

time frame than me might say yeah I like

that I'm going to buy the break of this

high and then I'm going to sell some on

the breakout Above This level right so

if I buy some at 74.10 and sell some at

76.20 that allows me to say okay now

I've recognized some of my gain here and

if it rallied up in this manner where it

goes like this

uh then I would put my stop under here

and even if it came back and stopped me

out at break even I would still have a

third off up there and I would still be

profitable overall so that's that's the

way I like to do it sell a little bit on

this breakout maybe I have a third maybe

I have two thirds left my stop on the

balance will go under here and then I'll

try to be a little bit looser with that

final stop and who knows maybe it goes

on to 90 bucks a share and I've still

got a third of my you know uh last piece

there so here's the two time frames

together and there's the year-to-date

anchor so it's kind of pinching we can

talk about a pinch people love the pinch

um but you know the problem with the

Pinch A lot of times is people will

Point them out to me on Twitter and say

hey Brian look at newer it's pinching

between the V web from that Peak and

there and it's just kind of useless

there truthfully instead you know we

want you know notice how the support

became resistance flip back to support

we've now got a Rising 20-day moving

average curling under it a rising 50-day

moving average so it took some time for

buyers to regain control they're not

there a hundred percent yet but they're

in as good a position as they've as

they've been in to say if it breaks

above here with a stop you know ideally

maybe it pulls back like this and this

is where I want to buy it tomorrow but

if we look at the longer term chart

what's the potential here

's our anchor from the high the year and

a half ago is that you know that that

adds a piece of confidence that this is

an important level because it's the

average price since that high now just

regular technical analysis maybe it's

going to run up in here there's almost

no price memory in this Zone this is

where we would expect to find Supply so

maybe that's where this stock is going

it's a level of interest on the upside

where if it got up there quickly maybe

you sell some or maybe you just say hey

it's battling with that so I'm going to

set my stop real tight to lock in my

gains or if it doesn't it keeps going

like this well then great I'll continue

to raise my stop there

yeah perfect and you mentioned the

anchor view up pinch uh for people who

aren't familiar with that could you

maybe run through one more example and

talk about how you would Set uh the

anchor view office on the on the top

side as well as at the bottom yeah so

what what a pinch really is doing and

you know here I didn't draw it properly

where's so there's January and what is

what it's telling us is you know from

this point the beginning of the year the

buyers are in control they've been

defending the average price since the

beginning of the year so there's a

motivated buyer who said you know this

year we like the prospects for newer

rate we have a mutual fund that you know

wants to buy you know there's a hundred

thousand shares outstanding we want to

buy a hundred million shares outstanding

we want to buy five percent of those

we're gonna buy five million shares well

we're gonna buy on pullbacks to that V

web from the beginning of the year we're

gonna defend it there we're not going to

chase it up here in fact you know we

purchased 5 million of our shares and it

gaps up here let's sell a million shares

so that when it pulls back down we can

replace those it's just you know trading

on a bigger scale and now accumulating

in here and saying we're going to buy as

much as we can because this is the naive

price the trader for this year could get

so they're providing support at that

level there's a buyer buyer you know

group of buyers there and it also is

further giving confidence because that's

the rising 50-day moving average so like

we were saying earlier you know there

might be a group of buyers or there

might be a group of shorts that shorted

up here on that Gap up and they said

we're going to cover the 50-day moving

average we're going to short it down to

the 50-day moving average or that long

fund might say we're going to sell a

million shares down towards that 50 day

and when it gets to the 50-day we're

going to flip and put a bid in so we

don't crush the stock the short seller

is going to say we're going to start

covering the 50-day and it's a supply

and demand equation that starts

balancing out the sideline cash will say

hey it's the year-to-date V web maybe

they recognize that they're at the

50-day moving average we're going to

start to nibble and then it gets above

the 20-day moving average but it's

extended so pulls back the 20 crosses

above the 50 right in here it's holding

the 20 and the 50 and it's holding the

anchored V web from this low right in

here if I made a big mess there but

let's just clear that up so it's you

know it's at this anchor it's at the 20

and the 50-day moving average this is

you know worst case a stop would go

under here I think for somebody who's

looking to say maybe hold this for the

next month or two you can also look at

it like this is this a shoulder this is

a head and this is a shoulder and

there's going to be you know buyers as

it breaks past the neckline well maybe

I'll sell a little bit on that break to

them it pulls back and then maybe I'm

going to add to it and you know this

should hopefully bring about the bigger

move on the weekly time frame and we're

getting there by looking at the shorter

time frame uh or that 30 minute time

frame go

on that 30 minute time frame is where

we're making the decision so it goes

back to Trend alignment we'll identify

you know the big picture on the weekly

time frame and say that looks good you

know this was an earnings report someone

got motivated what are the motivations

of the different groups I'm not talking

about the magic of the V web as much as

some people want it to be that because

oftentimes it seems magical but it's

about why there's buyers and sellers

that congregate in that area how can we

use that information to our advantage

narrow down on this puzzle and make what

appears to be a low risk purchase and

get involved in emerging potential large

uptrend

yeah perfect and I like how you pointed

out when uh you're looking at the area

where the Confluence of the 50-day

moving averages you're talking about the

psychology of all the different

participants and why you know that might

be a level of interest for you know

multiple groups of people who trade

differently but it all kind of comes

together at that one spot and that just

increases the probabilities of you know

that level being respected obviously as

you've kind of drilled into my head a

little bit you know nothing's absolute

you don't you don't want to buy before

the strength but it did respect that

level ultimately and pull back and now

present another another potential

opportunity another higher low setup

yeah it's it's not the market right I

mean when we were two two years ago when

we're coming off the covered lows you

could buy any pullback you could buy

ahead of a breakout and you had very

good odds it was going to continue but

we're in a very selective Market where

things like you know uh

um what was the one I just uh mentioned

um you know Cube they break out and then

they just come in hard I mean if you

didn't sell you know the next morning

you're you're at a loss so you've got to

take some off the table and it's just

about knowing the environment that

you're in and hopefully being able to

identify those those situations where uh

they come together and you can

you know get the low risk opportunity

and ride them for the time frame that

you're engaged in yeah and and how have

you been handling you know the more

choppy Market

um obviously 2020 was you know

abnormally good but um are you a little

bit quicker to take profits are you

looking for short-term time frames how

are you kind of adapting to to still be

able to trade and and manage risk as you

as you go in this type of environment

well so the you know the again the a lot

of these moves have have failed to to

follow through not not all of them of

course I mean you can always look at you

know something like Nvidia that's just

been riding this beautifully higher

um and there's been some you know great

moves in there for even shorter term

Traders now maybe it's getting a little

bit heavy right but so what I what I do

Richard is I just don't have a lot of

confidence in this market yet it's

getting there maybe but I still think

we're you know could see if you had a uh

uh head fakes so I'm taking each stock

based on own merits I'm not as concerned

about the market because we've at least

you know we're at least in late stage

one maybe getting ready for a a a trend

that could hold we're just entering

earnings season so maybe that's going to

be the uh yeah or maybe that's what's

going to crush it as well so we have to

be aware of that so everything I do has

been

unfortunately almost everything I do has

been smaller share size I hate it but I

I'm just trading like a because

more things are going against me and

I've gotta you know be able to number

one get out of a little piece right away

to lower my risk that's been really

crucial for me

um so just like we saw on Cube if I

hadn't sold any I would be taking I'd be

taking a loss and I'd be really annoyed

with myself because my process is to

sell some into strength especially in

this market if we're in a you know

beautiful stage two up trending market

and everything seems to be working on

all cylinders I'm not going to be as

quick to sell that first third if I

really feel like I'm at the right entry

point I'm going to be involved with you

know larger share size I'm going to you

know Trail my stops a little bit wider

behind because I know that you know I

can account for uh you know probably

less volatility as as the uh soros's

quote that I like is volatility exit

turning points and diminishes with the

trend so if we're in a trend we don't

expect large volatility but when we're

battling it out buyers and sellers for

control you know that's what we're

seeing that's what this volatility is

about is that we're you know trying to

look at this you know uh s p on a weekly

chart and it's still a battlefield right

and it's just not certain yet we've

we're looking as good as we have that

maybe we're going to you know sustain

something but what would you know to me

what would say we're in a stage one is

getting about stage two is getting above

here but it doesn't mean I would buy

there because we just you know went one

two three four five six weeks to get

there instead I think it would break

there

and it would do this

and then I would want to get involved

right here thinking that okay this is

the higher low I'm going to see it do

this and if the market can do this and

continue to you know do what it's

supposed to or maybe a little shake out

here and there and then continue higher

that's the ideal scenario but we're

we're not quite there yet

yeah perfect

and getting back to if you could

actually bring up the Nvidia chart uh I

thought that might be another good

example to talk about the the handoff uh

as it's in the trend maybe go to a daily

uh can you talk about you know how you

would Place The View UPS here where you

would anchor them and also how you would

do the handoff process maybe it's not

long enough of a trend but you can do

make sure no no it is and so you know I

would anchor one to that low when would

I anchor it to that low is is the

question like well how did you know that

was the load anchor well I wouldn't have

known it I wouldn't have set that anchor

till probably you know three to four

days later because I would say hey we

had that big decline we

rallied from that and that seems to be

holding so far so I'm going to set an

anchor there how does that you know

where do the buyers take control from

that last sell-off so we see that this

is where the buyers really took control

with that we knew for a fact that from

that break above the declining 200-day

moving average which was sold into we

knew for a fact that the average

participant long from there is now in a

winning position the average short

seller is now losing money so we might

want to even just anchor one right there

from that break point and then we saw

the pullback to that and it touched

there so we could anchor one here and

look at how it touched right there and

there so I would have on this day I

would have anchored one here and I might

have said hey time to get out but we'll

I keep that one on because then it you

know but there was no trade there

because it gapped away I wouldn't have

bought at that level it would have been

a mistrade so it rallied up and then

guess what well look it pulled back to

this one again so that and then it had a

strong rally so on this day I would say

that was an important low let's anchor

to that level and now here we are we're

holding you know we're just battling the

20-day moving average and we're uh you

know still holding above the anchor from

this point so if it does this I wouldn't

sell it short mainly because it's still

above a 50-day moving average I would

think maybe though if it does this it's

going to do something like this and then

come down towards that 50 day if it gets

trapped below that 20 if it gets trapped

below that anchor over here then you

could say is this a shoulder this is a

head and this is a shoulder so in order

to really see that better though we

could look at like 130 minute time frame

and here I've got a 5 10 and 20 day

moving average so actually let's just go

to a 65 minute time frame and there you

can see it really you know again so is

this

you know a head and shoulders pattern

that's breaking down and if so this was

an important recent High you know maybe

my stop goes just above this level right

here so if it rallies up a little bit

breaks down short here with a stop there

if you're interested in shorting it I'm

personally not interested in shortening

because it has a rising 20 and a rising

50-day moving average right but I could

see it pull back maybe if it was going

to you know experience a deeper pullback

I could see it come down to that 50 day

I would be more interested in seeing how

it behaves there and then buy it as it's

breaking away from there with a stop

under here

yeah perfect and one one thing new that

I picked up for your book was uh you pay

a lot of attention to the slope of that

anchored V web so looking at that

original uh thick blue one uh you know

that's Rising quite quickly what does

that indicate to you about you know the

the strength of the buyers and and the

aggressiveness that they're that they're

exhibiting yeah they're motivated I mean

they're really motivated that's the

average price for this year now one

thing is that you know as we start

getting up in these nosebleed levels I

mean a pullback seems highly likely at

some point in here soon something that's

probably going to come very quickly too

and and you know maybe then you have

this prior resistance that might act as

support this year-to-date anchored V web

starts sneaking up like this

um I think though that you know it would

probably be you know maybe the anchor

from here right so you can see that's

where the buyers really took control

after that little pullback right there

it touched it was defended it touched it

was defended so that view app would

probably tie in a little bit better with

this and you know I'd be aware of this

though because if it continues lower I'd

say okay well there's the year to date

so again I don't want to buy the

pullback to the 50-day moving average I

don't want to buy the pullback to this

level I don't want to buy that pullback

I want to see instead that if this is

the pullback that it occurs like this

and that five-day moving average comes

bearing down on it like this and then

you know if I just extend this over a

little bit that you know price action

does uh does uh where's my tool here we

go price action does this and maybe sees

a little bit of a of a ShakeOut maybe

the five day comes down like this I

would want to be a buyer here with my

stop underneath this high or low maybe

half of it there and half of it under

this higher low and that might occur

here it might occur at the 50-day moving

average it might occur here then you

know maybe there's going to be people

saying hey well you know throw some

Fibonacci Fibonacci on there that's a

38.2 percent retracement right there of

that low to that high so there's another

you know group of people group of

traders that say I short it down to the

38.2 percent retracement then I cover

another group says hey we're long 20

million shares of this stock let's sell

it down to the 38.2 percent retracement

and then we'll flip from seller down to

buyer in that level and recover some of

our position at you know same it's the

same psychology it's always about

thinking about what motivates other

people is it the 50-day moving average

sometimes it is so I keep those on my

charts in addition to the anchored V web

the the you know so just if I can go on

a little tangent here that might answer

some questions for people is you know a

simple moving average or an exponential

moving average either one they're good

they you know there's a lot of people

that base trades around them a lot of

people will say they do it though

because it works because there's often

support there there's no magic to the

number 21 there's no magic to the number

50. so what we're looking at is just a

crowd consensus that that says it's a

reason to look at that level just like

the 38.2 percent this is a crowd

consensus the 38.2 percent is a normal

pullback without ruining the uptrend so

let's look in there under the curtains

to see is it is the is the five day

moving average still declining and is

the stock getting rejected on rallies up

there and just continues down well fine

I I don't have to own this stock there's

no reason to own it if it's just doing

this right

the v-wap though what it tells us is

from a certain point where the buyers

were motivated it's price memory it says

that from this point where the buyers

regain control it was defended it was

defended there was maybe maybe there's a

program that got turned on there that

said we're going to buy 8 million shares

for the next six months but if it gets

more than x away from the uh view app

from that action point we're gonna sell

some and when it gets down there we're

turning the program on we're going to

buy as much as we can we're going to try

to fill this order as best we can so

that when if as if they're expecting the

weekly time frame to you know continue

to do

something like this

and go on to new all-time highs I mean

the stock is capable of it right so they

want to buy as much as they can on that

pullback

shorter term Traders smaller Traders we

have the luxury of sitting out the

pullback we don't have to buy the dip

it's stupid don't buy the dip buy

strength after the dip that's what we

want to do

yeah perfect and one question I had for

you was it maybe you could go back to a

daily time frame for this uh when you've

got an acre V web

um maybe from the year to date if you

could do that do you take a look at how

extended above that view app we are as a

measure of you know maybe the Stock's a

little bit stretched out it might need

more of a basing period like do you use

um I don't know uh standard deviations

from that or maybe just look at it

visually but is that something you take

into account at all but you know that's

a good question a lot of people like the

standard deviation bands I prefer not to

use them simply because I do like the

simple moving averages is what I you

know cut my teeth on simple moving

averages and I still have a lot of

belief in their value and and I don't

think it's a coincidence either that you

know there's buyers at this 20-day

moving average and a little ShakeOut

below it so I'm more interested in

what's the direction of the 20-day

moving average than whether it's above

or below it then maybe it's a ShakeOut

and same with the 50-day moving average

that maybe it comes down to it and

slightly through it but then I would

expect this and recover so uh back to

your question though is I want to look

I look at it visually and say hey it's

pretty far extended from there I've got

to be a little careful but when I look

at the daily chart I see that there are

aggressive buyers defending not only the

20-day moving average but the anchored V

web from the buyer where the buyers

really gain control from this point I'm

sorry this point right here

and this point right here and then again

anchoring to this point saying we really

expanded away from there that's the next

level of Interest the 50-day moving

average sneaking up with it uh so it's

always just you know being aware of the

important levels on different time

frames and what type of participants

might be motivated when it's this far

extended I you know and you see this

what looks like a clear uh Head and

Shoulders pattern I'm not going to mess

with it because the primary trend is

higher but I know that there's people

out there shorting this thing and you

know the beauty might be that it breaks

down below there comes back up and

squeezes all those shorts right and I've

got to be aware of that as well

yeah perfect that definitely answers my

question and

um I know you've covered this before and

it's definitely in your book as well uh

but could you kind of give an overview

of maybe a quick guide of you know

important spots uh significant days

basically where you like to Anchor an

anchor B web uh too because that's kind

of the subjective part of it but it's

it's the art right uh it is the art yeah

so so again it's it's about psychology

what's important to the market earnings

reports are important to the market

anything that causes a big supply and

demand disruption whether it's an

earnings report on really big volume or

is just an analyst upgrade because this

analyst kicks ass or whatever it might

be but what is you know what gets people

excited what changes the supply demand

perception a lot of times it's earnings

at the end of the day stocks trade based

on earnings they're trading on fused to

treat your expectations for the company

and once in a while we get a true Supply

a surprise rather it breaks above the

anchored viewf from the IPO so here I'm

answering that with some examples of one

I like it from the IPO that you know we

had that as we spoke about on the one

minute chart for the Spy it gets up

there it has that Battleground you know

just like we saw on that one minute spy

and here we are on a daily chart and

then the buyers take control so I would

probably set one where did the buyers

take control right there and then I

would go back and say you know as a

swing Trader well it's breaking down I

don't want to be involved in that

anymore let's see as it breaks down

there now I know this was an important

high so I want to set an anchor to that

high and see how prices uh behave around

that and maybe that becomes a level of

resistance in the future which in fact

it did so as it breaks above there well

you can see on this 30 minute time frame

on on

um you know it got a little bit extended

in here and they shook people out pretty

hard this was the earnings report it was

defended defended looked like it was

defended saw ShakeOut so that's an

important low and I knew that right here

and now I'm looking at this and saying

well that

event what's the you know who's in

control buyers or Sellers from that gap

down who has control well the buyers are

back in control because that anchor V

web lines up right in here along with

the anchored V web from the earnings

report and that Mo that that low so now

I want to look at it a little bit closer

and say well we had a ShakeOut two days

ago what is the average price from there

okay so when we look at that it tells me

that today you know we gapped up we

pulled back now if we can pull back down

into here tomorrow and then the stock

starts getting going right here I want

to be a buyer right here maybe even

maybe even add some there uh

but I think this would be just a little

bit early which is fine

um and my stop initially I mean your

worst case stop I think would go under

here otherwise you know under this

cluster of of volume weighted average

price levels which is also where we see

that Rising five-day moving average so

it's got a little bit extended I mean

you look at us go right it only rallied

a point it's three percent though right

I don't want to chase it three percent I

want to buy after the pullback and it

starts to Rally again and then set half

of my stop under this V web cluster half

of my stuff under the morning low as it

climbs higher to daily R2 later in the

day I sell a third I raise my stop to

break even on the balance now I've taken

UH 60 cents on a third of it and I've

got two thirds left that now if I get

stopped out at break even I'm still

going to have an average of 20 cent gain

in case it falls I you know I don't like

crystal balls in the shop it doesn't

tell me but but I've got to be aware of

this as well so the anchor from the

recent high is that going to Halt it so

maybe that's a good place to sell that

first third right up in there pulls back

and then maybe so tomorrow's Friday

maybe it shakes out and then Monday

morning it's Up Up and Away past this

level I've got a head start on the

breakout buyers for a reason

because I know as a fact the sellers

lose control above that point from the

highest point paid if this if there were

very aggressive short sellers where do

they get into trouble they get into

trouble Above This level not above that

level because they're you know dollar

cost averaging averaging into it it's

it's you know it's assuming what the

average price for the crowd is not

assuming the average price it's

factually that's the average price from

that Peak

yeah perfect and uh this is also an

example of a breakaway Gap so maybe we

could go back a few days to uh the

actual earnings date and talk about uh

the Breakaway gaps because you break

down in the book The the four different

types of gaps and the Breakaway Gap I

think uh you know especially on earnings

reports that's something a lot of people

are interested in and are looking to

accumulate kind of Entry tactics to to

address that type of situation

well so there's three types of uh gaps

in in terms of traditional technical

analysis I'm just trying to move that

over there because the camera's in the

way again

um but in traditional technical analysis

you have three gaps one is called the

Breakaway Gap that's kind of like the

ignition that really got people excited

but it got ahead of itself so it had to

slow down and check in and do the buyers

are the buyers still interested in you

know maintaining control and it appears

as though they are because they let it

slide a little bit then they came in and

created a higher low and you know that's

the way you have to think of it is the

buyers created a higher low how did they

create that higher low well they showed

enough demand in there to stop to to

absorb the supply so it can stop going

lower and then once they get rid of that

seller it was free to go higher so if it

breaks that pattern now of this low and

this higher low well then I I don't want

to be involved because maybe it goes

down and this is a failed Gap I I don't

want to take anything for granted and

make assumptions that it's just going to

go higher because it would suck to say

hey I love their sneakers they sold a

lot of them they're making a lot of

money the positive earnings surprise the

shorts are getting squeezed but

something happens I'm not going to be

around for it so the Breakaway Gap and

then typically somewhere around halfway

between a stocks you know final move and

oftentimes it actually occurs you know

three months apart between earnings so

maybe next earnings let's just call that

three months to this point maybe in

three months they report earnings again

and it does this and then it it has this

Gap doesn't quite fill it you know all

gaps get filled people say but often you

know maybe a year and a half later as it

comes back down but this is what's known

as the measuring Gap

so the measuring Gap

occurs typically halfway through the

move so if this was the Breakaway and we

went from 21 to 20 to 36 that means that

that was 15 points so if we add 15

points to this break point that tells us

our next Gap should come up around here

that so the measuring Gap simply says

you know we typically see two moves of

about the same price uh price magnitude

and that's our you know price objective

doesn't mean it will be the the high but

if then in six months from now we saw

another earnings report and then that

one gaps up you know let's let's just

call this that earnings report three

months six months from now it might Gap

up and now it's you know with the stock

has gone from 21 to 51 it breaks to new

all-time high on that earnings let's say

well that would be a great place to sell

some because you're likely to see you

know at least a longer term time

correction it's kind of done what it's

supposed to do unless the earnings are

just you know through the roof you know

double what analysts were expecting and

that sort of thing

um and those are you know the guidelines

just like all technical analysis there's

I mean what's the magic of these three

gaps they tend to occur in this fashion

and people-based decisions around them

so they're things we need to be uh you

know to look at and consider important

in our analysis whereas you know some

people trade they'll tell you

successfully by looking at sunspots I'm

not going to laugh at that maybe they do

but I know that they're in the very

small majority minority maybe they're

one in a thousand people and maybe

they've just cracked the code and that's

great but there's not going to be

demand all the time when Mars goes

retrograde and that guy the astrologer

is buying and he Nails it because

there's only one or two out of a

thousand people looking at that but the

50a moving average 90 percent of the

people who look at charts are looking at

a 50-day moving average so we have to

look at it

yeah for sure

um and another good question that

somebody asked on Twitter which I think

is very important to talk about uh and

you you address it in the book as well

um what happens when the v-wop doesn't

work uh how do you deal with those type

of situations where it doesn't seem to

respect that level it undercuts it or or

different situations where you know it

it doesn't act as it should based on how

you're interpreting price action yeah

excellent question and actually uh

Richard you know prior to you getting

that question if you recall on the DM I

said hey feel free to trip me up and you

show somewhere it didn't work because it

was a lot of value to be learned in that

and the answer is kind of the same as

sometimes the 50-day moving average

doesn't work well what do you mean by

work it's not a magic buy Spot it's a

level of Interest so if the stock you

know doesn't get up through that level

and fails did it work is resistance if

it doesn't hold Above This V web that's

why we use stops and there's no perfect

system nothing's going to work all the

time you know like as I point out and I

showed you know numerous failed examples

in the book I wanted to be a book that

says hey guess what real life trading it

doesn't work all the time and this looks

like a beautiful buy at the touch of

this V web but the next day it got the

snot kicked out of it so how do you

handle those situations my preferred way

to handle those situations is to not buy

the touch of the v-wap right here but to

buy strength as it moves away from it

not to buy the touch right here but to

buy strength as it moves away from it

because it might be this touch then

you're down a dollar and a half you're

like well where's my risk management

so I like to buy strength after the

touch I like you know if I'm looking to

short this thing because it does this

well I would be looking to sell short

not as it touches that five-day moving

average or that V web I'd want to sell

short as it's failing right here and

then I know I have that lower high to

protect myself with so it's about

combining all the pieces of the puzzle

together and not just saying I'm gonna

buy blindly at the view app because to

me that's just foolish

yeah perfect

um and is there a certain number of

pullbacks to a v-wop that you would

consider buyable because often you know

when we're looking at just a simple

moving average the 50-day moving average

often the first one there's some basing

of respects that continues the trend is

it a similar process for for the anchor

view web I kind of look at them all just

uh independently because they're they're

they are subjective uh more subjective

than a 20-day or a 50-day and that's

what makes those popular is they're easy

they're on every charting platform

people have been trained on them they

use them

um whereas you know looking at this you

know again do I want to buy that first

test no I want to buy strength away from

it and what I often do is actually

put a view app and say well you know

what that was the high of the move right

there that was the high of this move so

I don't want to buy this tells me the

per the average from the highest point

from there and right here the average

point from there is now making money so

I want to buy here I want to buy here

and then even if I wanted to buy you

know this one I would buy at this point

right here

and so you know on and on it goes that I

want to buy I want to be aware of the

touches of those V webs but I also want

to have confirmation that the average

lung from the highest point paid is now

filling in a good spot and the average

short from the highest point paid is is

feeling pain and that gives them

motivation to go in and cover

perfect and there's another good

question and we you've definitely given

a few examples

um already but uh please ask Brian to

show a few setups where he's taken uh

that he's taken recently where he's

combined the five-day moving average and

the anchor view web to enter a trade uh

he's discussed two purchases in separate

videos with TL but I don't think he's

combined the two to show his overall

entry tactic especially in the current

environment sure um I mean I talk about

these in my weekend video too I don't

know if he's a subscriber but

um you know here here's uh this one is

brze I put this one on the other day

there's the anchor from the IPO the I I

just put those on there that the stock

came public at 65 a share that's just a

reminder to me

um but you know so the most recent

really relevant High big high was right

here so the buyers are back in control

from there they're also fighting this

200-day moving average right and that

provided resistance three times in a row

then it gapped above it on earnings so

let me switch the scaling over here so

we can see this and now we've got I'm

looking at the stock and you know it

pulled back and I was thinking maybe

this is a ShakeOut because it tested the

year-to-date V web and tested the 20-day

moving average in the 50-day moving

average and now it's still now that the

200 days in the way but over to the

shorter term time frame this is that Gap

and I set an anchor there it hasn't been

really great you know truthfully and you

could say here's an example of one where

it doesn't work because it's you know

maybe you buy here but you'd have to get

stopped out over here maybe you buy Here

you'd have to get stopped out over here

it worked there

um and we saw a gap lower so I was

thinking maybe this is a uh a ShakeOut

but I'm not you know what you didn't see

on the Twitter which I you know provide

this stuff for subscribers and that is

that what I'm actually looking for in

here is for the buyers to say they're in

control now it looked like from that Gap

lower

that was encouraging but we had a

declining five-day moving average so I'm

not a buyer yet what I want to see is in

the next couple days if this stock can

you know show that this was in fact a

just trying to move that around so if if

this you know if it

so that was three days ago so what this

tells me is

that was four days ago that was five

days ago if the stock is down here that

five-day moving average is still going

to decline for the next one two days

right because we're getting rid of this

data but next Tuesday when we get rid of

this data on the open and if the stock

is here maybe it's done this

and then it breaks a higher high above

that right here well that tells me now

we're above that level how does that tie

in with the anchored v-wap from here

well maybe you know that

gets a bunch of volume down here I think

I would probably buy some be aware of

this maybe sell a little bit expect it

to do this and pull back to the ryzen

five-day moving average add to it here

so it's it's all about you know as you

can see like when I draw on these charts

it's always not just about what happened

it's about how do I in Project forward

based on how these stocks typically

trade so on a different chart I have uh

you know you've seen this Richard I have

a uh let me just pull it up this is 20

days ago and this is 50 days ago and I

have those there to remind me how the

slope of the 50-day moving average might

change in three or four days if we're

getting rid of a big gap that might have

occurred you know 47 days or 53 days ago

just as we're doing here we're getting

rid of the data you know tomorrow from

this day and on Tuesday from this day

I'm sorry Monday because today's

Thursday it's so maybe it just needs a

little bit more time and it's going to

do this and time is fine there's there's

no hurry to get involved people who buy

the pullback or buy because it you know

because it's closing the gap or whatever

their reason is you know you're just

buying weakness

hoping I want evidence that this trend

has has flattened out and it didn't do

it you know it didn't get extended and

it breaks above it but instead it coils

up underneath it I can buy in here set

my stop at a real reasonable place maybe

half of it here and half of it there and

then sell a third as it breaks above

this high

and then you know rise raise those stops

up under here then under here and if it

breaks above that high so another third

and just continue the process and and

just try to have guidelines for every

scenario and always trying to anticipate

what could go right what could go wrong

how do I get out of this mess if it

becomes one right

yeah excellent and one question I want

to ask you is uh say there is an

anchored by pitch and it pushes through

it's it gets nice and tight nice and

contracted pushes above that pinch and

then retest the anchor V web and then

reconfirms show some strength after that

is that a potential entry spot or are

you always looking to get involved right

as it pushes through uh the the top of

that pinch yeah so we kind of did that

in maxn right so maxn was a recent one

it gapped up on earnings it did that you

know first couple days in there then it

shook out and on this day we knew we

could anchor a v web to that point

because it seemed like that was the end

of that pullback and then we came in and

saw that the buyers stepped up

each of these days it had the 20-day

moving average had a chance to catch up

to it and then you could take a look

then let's say at a 65-minute chart and

we can say from that you know was it

pinching between these and it was kind

of sloppy but again I don't want to be a

buyer here

because it just rallied from 21 and a

half to 26. it makes the higher low it

touches it and gets rejected on the open

that day the next day though it breaks

it and you can see it tested it here and

it tested it here so again I missed the

second trade I actually got stopped out

of this one and I don't own any of it I

bought it over here on this day and I

got out of my last third right here and

I never got back in what I should have

done was been looking at let's say a 15

minute time frame and say well from that

Peak and from this low you know and that

that was the problem is that it didn't

give a clean entry I guess you know if

you look closely at this day these are

30 minute 15 minute candles so if we

look at that let's see if we can look at

that on a five minute time frame

um and that was right here this Gap so

I'm if I was paying attention to it I

might have purchased here with a stop

below the low of the day as it got back

above the daily V web

um and you know then it makes these

lower highs so I'm just out of this one

but that was that that's off the top of

my head that's the best one I can think

of that uh recently did that and I did

not purchase so again the test came here

and then we saw the strength away from

yeah perfect

um and

you you may not have been screen sharing

yet I think this might be an interesting

concept to show with a chart in mind

um the anchor V web based on the

calculation it kind of changes the level

based on the time frame you're looking

um because it teaches a thousand if

you're on a daily chart uh it calculates

based on daily if you're on a five

minute based on the five minute uh could

you kind of um

re-emphasize why you always like to look

at the lowest granularity possible and

do you ever consider the level the daily

version of that view app is on that

lower time frame kind of similar to how

you look at the the five-day moving

average on a lower time frame using

different you know different

um period moving averages the

corresponding uh yeah yeah so if you I

mean if you look at a daily view app for

one day like you're not going to see any

value in it at all in order to get any

value from the daily view app you have

to look at it from a very shortest term

time frames now what I'll do is I'll set

it first thing in the morning like on a

one minute chart

and as the day goes on about 20 minutes

in I'll change to the uh two minute

chart and then I'll go over to the five

minute time frame and I'll just continue

um you know look at the different time

frames

so that the most accurate is going to be

found on the shortest time frame because

you have a larger denominator you have a

larger sample size if you have a sample

size of one

it doesn't change right so it's similar

to I forgot how I explained in the book

uh if you were looking at

uh I'll I'll come up with that example

later I can't think of it right now you

can tweet it out or something yeah what

was that you could tweet it out or

something if you okay yeah um or find

the page in the book and yeah that'll

make people want to go hunt it down and

buy the book buy the book by the way

um if you don't own it uh I'm just

talking to the audience there it's my

pitch Richard yeah there you go um so

you're always gonna you know the larger

the denominator the more accurate it's

going to be But as time progresses in

this you know longer time frame has a

bigger diameter

divisor rather

um they're going to compress together

just like you'll see you know a 20-day

moving average and a 22-day moving

average or in approximately the same

place because they're close to the same

denominator

um whereas on a 130 minute time frame

you know which is three candles per day

there's your daily view app on the Spy

you could say Well it pulled back to it

but there's you can't you can't make a

trade plan for a day trade based on that

you've got to get down into this area

and see that did it actually even touch

it there it looks like it on those three

candles but it didn't actually touch it

in real life right it's just because

you're only dividing by three then you

don't and actually at that point it was

only dividing by two because you were

only into the second 130 minute bar of

the day and that 150 minute bar that

might have occurred in the first five

minutes of that 130 bar so you're

averaging 130 minute divider divisor and

a five minute divisor it doesn't make

any sense you want to keep the divisor

as clean as possible similar to the math

of the five-day moving average that I

don't use it on a daily time frame

because it's only divided by five but if

I look at it on a 15 minute time frame

and I look in there well I've got 130

periods there's 130 15 minute periods

over the course of five days so it's the

true five day where it's uh for a daily

chart it's only going to be the true

five-day moving average at the close

everything else is four days plus an

hour four days plus three hours whatever

it might be four days plus six hours

until it's four days and six and a half

hours now we're at five days again

yeah yeah that that's that's helpful I

think I phrased my question a little bit

wrong can we go to a chart of onon on a

daily chart uh because what I think what

I was asking I I think it's a daily view

app instead of anchored view app so if

we go to a daily chart here

um so that's one day is that oh daily

okay yeah daily so say say you anchor it

from that earnings Gap up day then when

it's pulling back into that level uh in

the recent week do you ever look at what

that uh anchored view app level is on

the daily chart but look at the lower

time frame that same level so I don't

know what you know just under 29

uh 29.50 so basically yeah I want to get

down in there and see what's really

going on gotcha um because again at that

point your divisor is one two three four

five six seven eight nine ten over 12

13. that's day 13 where it hit it

whereas if you're looking at a 30 minute

time frame yeah

uh you know six uh 65 of these over the

course of five days so you know you're

13 days in your divisor is 250 or

whatever it might be so it's going to

give a much more accurate reading you're

always going to get your most accurate

reading on the shortest time frame

possible as as we started out the

conversation with what's the right

um uh uh formula is it open high low

close divided by four or is it just from

the high the true v-wap is only found

from tick data everything else is an

approximation so we want that divisor to

be as large as possible it can't be as

large is every single trade so instead

we say you know in the first five

minutes of the day I want to look at a

one minute chart with that spy if I'm

looking if I'm focused on the spine I

think there's an opportunity or some

style or Tesla gapped up and I want to

see how it's you know behaving with that

you know this could be the one minute uh

let's let's look at it in Tesla

um you know so here's today's uh

action in Tesla you know where did the

buyers

gain back control after that Gap that's

that article I wrote in 2008 chased the

Gap by the pullback well buy the

pullback here and now you're down a buck

in the first minute of the day and

you're feeling all anxious and you think

oh it's going to close the gap I'm

just going to puke it here or buy here

with a stop below the low of the day now

we have a strategy do you buy the you

know once it gets back above the high of

the day well how well did that work

realistically if you're a day trader and

you buy 183.50 and then it goes down to

one in seven 181.70

you're feeling like a fool in there I do

I do at least I you know I don't have

the faith that it's going to continue

but look at how you know this was

defended perfectly later in the day so

if you're looking to buy it later in the

day and you saw it bounce from there you

would either buy it here uh I'm sorry

um let me just redo that you would

either buy it on that touch

as it's breaking away I like breaking

away or you'd say wait a minute I want

confirmation that from that last time we

saw a high I don't want to buy it there

I want to buy it here

and set my stop under this level and

look at how that which was resistance

flipped to support so it pulls back and

will say okay well as it goes to this

point now my stop is there on the two

thirds I have left because I sold a

third on the breakout of the new high of

the day and ride it into the close and

either hold it overnight switch to a

longer time frame see if it's Justified

to hold it overnight or what might be

going on in here which Tesla is pretty

close to the year-to-date anchored V web

and uh you know buyers of kind of

defended that but we're also below a

50-day moving average so we're kind of

in no man's land on Tesla I think people

are you know wasting a lot of time in

here

yeah yeah thanks that that definitely

cleared up what my question so thank you

for that

um I think uh I don't have too much more

to talk about or were there any other

charts or examples that you personally

wanted to cover today to show the

audience or I mean if you can look at

you know the the principle again is that

you know the fractal nature of technical

analysis we've looked at every single

time frame here today we're from one

minute uh up to weekly and everything in

between pretty much 130 65 30 15 5

minute the thing is you know when it

comes to Trading

it I've been doing this for 32 years

1991 I started full time trading you

know even before then but you know full

time and and it's easy for me to flip

through these and make it look easy but

it comes with Decades of experience and

My Chosen time frame I'm very I have

strong conviction in what my time frame

is especially for this market now if we

enter a new bull market I'm going to try

to stretch my time frame if the market

allows me to and that's the difference

is I'm not going to say now I'm a

long-term investor my thing it will be

let's see what the market allows me to

hold it's not up to me to decide well

now I you know and I think the Market's

in a stage two uptrend so I'm going to

buy stocks and sell them in three months

that's you know that's foolish right

it's just as foolish as saying you know

my stop is 10 away the Stop and that

that's what I maybe would want to uh say

is you know the definition of trend is

always where my stop is so that if I

look at isce and I'm long at 27 well my

definition of trend is higher highs and

higher lows so my stop always goes on a

long underneath the most recent and

relevant higher low for my time frame

because if that higher low is broken so

tomorrow if if this stock

rallies like this tomorrow morning I'm

going to raise my stop under this low

because now I you know especially if it

gets back above this little v-wap right

so I know that the buyers are back in

control for my time frame this is the

most recent relevant higher low it's not

about I'm going to set it to standard

deviations away I'm not going to set it

below a moving average or the week to

date volume weighted average price or

any of that stuff it's about you know

listening to the the definition of Trend

in the market and so that even if I buy

it right here my stop is under here it's

not under the five-day moving average

it's always based on trend is you know

for my time frame and a lot of people

will get confused like because I'm

flipping back and forth between all

these time frames a question I get a lot

is well what's the most important time

frame

and my answer is truly all of them

because they create a picture it's like

asking Van Gogh what's the most

important color to paint with it's it's

not green it's not blue it's not yellow

it's it's how they mix together it's how

they work with each other it's not black

and white we're not doing black and

white art here this is full color living

breathing organism that we're dealing

with the stock market and it's the

compilation of all the hopes desires uh

and you know actions of all the

participants so if we can say what

motivates the biggest participants most

often 50-day moving averages anchored

v-waps multiple time frames great we

don't need and there's no reason that

you know I would never trash any

oscillator or indicator that you find

useful but you can draw some pretty

wacky stuff on these charts and if if it

fine if it's value to you use it you

might look at this and say you know that

anchor view app it's all in that guy's

head that you know he's he's he it's

weird I don't get it don't use it you

use the stuff that makes sense to you

there's no following one person and

saying here's what I should do because I

look up to that person because I have

this many Twitter followers or they want

a trading contest because you're never

going to be able to mimic somebody

else's trades it's about putting it all

together and finding your own style

yeah I think that's extremely well said

and I like that metaphor over there with

with painting I think you came up with a

good one there I just came up with it I

know it again that was great that was

great um for for people who do want to

dive deeper into anchor V web

um what advice do you have them about

where to get started and and you know

how to how to accelerate their learning

curve as much as possible with regards

to that indicator

I I think that you really want a tool

like tc2000 or um you know another good

one is is trading View for the simple

reason that some of the other ones that

offer it uh what what you want to do is

you want to play around with it okay you

don't want to right click type the date

and the time in and maybe get that wrong

and retype it in like you have to do on

thinkorswim

um you know people always say well

when's think or Swim gonna get it well

people have been asking for the last

seven years to get it and you know just

go get another trade you know charting

platform that has the tool but you want

to get one that says let's say you added

it there and say whoops I meant to add

it to this point where I can drag it and

drop it back or if I hit this repeat

button I can just go in click that

anchor and say I want to see how it

acted from there and from there and from

there and there and you know you can go

crazy with these obviously but if you

really study it there's value in some of

these right and and find out what the

value is to you read my book buy it on

Amazon buy it on Apple or Google books

or wherever else it's available and you

know learn the basics learn why

it's valued by institutions and why big

players trade around these levels

learn that's that psychology and then

watch it in action and decide whether it

makes sense and start anchoring from the

key points now some people will say you

know they'll they'll they'll say Brian I

entered the stock at 27 so I set an

anchor there they're like well

you're the only person who cares about

that level

that's important to you that's your in

in the whole anchor is based around

Daniel Kahneman and the anchoring bias

right what's the most important price to

me is it the close of the day no it's

where is the price right now in relation

to where I bought it so that's not

important to anyone except for you what

you want to say is

this was a big event there was a

structural shift in the supply and

demand that caused an imbalance the

buyers regained controls it made this

higher high right here so that's where

you want to buy it somewhere in there

and if that happened to be your entry

great I mean but nobody nobody cares

except you we had this little Gap lower

so that's important and it was defended

here just uh you know this morning

yesterday afternoon this morning it had

a nice bounce away and now if you're a

day trader this is important so maybe

you sold it at the end of the day

because it was fighting with that and

tomorrow if you're a day trader and you

want to get involved or even if you're a

swing Trader and you're like I

missed this one it's a little bit

extended but I want to buy it above this

this level here

um that's where the buyers take control

based on that V web and have my stop

under here

that's okay to get involved in the stock

that's you know may arguably extended on

the on the daily time frame after a five

six day move but as long as you have

your your tight stop and you know where

you're going to get out

there's nothing wrong with that but

yeah

yeah perfect

um Brian this has been fantastic I

personally learned a lot I'm sure

everybody watching did as well

um the link to this your new book will

be in in the description

um so definitely go ahead and check that

out everybody

um are there any other uh places that I

should mention uh where people can reach

out to you I'll have your Twitter down

there as well uh and your website but is

there anywhere else if people want to

learn more from you directly uh that

they should check out yeah I think

Twitter you know anything I do out there

that's not for Alpha Trend subscribers I

put on Twitter I mean I put my YouTube

thing on there so you don't really have

to go to YouTube

um Twitter's the the best place to to go

yeah excellent uh well thanks again

Brian for your time and and awesome

explanations and if you want even more

Brian uh I'll also link below uh your

presentation from the last chairline

conference uh so I thought that was a

fantastic explanation once again of like

using multiple time frames to analyze

the stock so uh go ahead and check that

out uh other than that I hope you guys

all enjoyed if you did go ahead and

leave a like down below we'd really

appreciate it and of course subscribe if

you want to see more videos just like

this one uh later on so thanks so much

and take care thanks Richard

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The AVWAP Trading Indicator | Secrets and Setups | Brian Shannon_ CMT