Happy Easter everyone!
Today I want to chat with you about something that you have to build in order to become more consistent: a simple strategy.
This episode will be broken down into two parts:
How to create a simple framework;
How to derive a simple strategy from the framework.
Before we start, make sure to read the first two episodes of this series:
We will focus on building a framework around VWAP (Volume Weighted Average Price) for the following reasons:
It’s widely used across the trading industry;
It’s a consistent approach to trading. Every day, VWAP will be here. You want something consistent to be able to measure your success and failures, in order to learn from them.
Sunday/Monday
Drop at the open followed by a rally during London's session. NY opened at the high of the day and prices saw a continuous nuke all day. VWAP was never strong support and prices failed to reach it again after it broke. Prices ended well below VWAP at end of the day.
Tuesday
Consolidation around VWAP before an impressive run through new highs of the day. Reactions at VWAP were very interesting and left clues for the rest of the day. Prices end the day at around VWAP and POC.
Wednesday
The most interesting day. Tuesday showed strength through VWAP's reaction. Wednesday was a straight day up through all 3 sessions. A day to study!!
Thursday
After the green dildo from the day before - look at Thursday's action. VWAP has defended every bounce with bears being in total control most of the day until the 4th assault at the end of the day. Prices closed at around VWAP. Very clean PA and lots of points to be made.
Friday
Second most interesting day. Clean breakout of VWAP then successful retest, maybe the cleanest setup of the week. At NY open VWAP was quickly lost + failed double top of London session indicating bear trend day.
Conclusion
You can make a career out of VWAP only. Study this week's PA and the reactions through VWAP. Pull the triggers when it's a clean setup. One trade a day can be enough.
If you want to give it a try to Apex, you can use my affiliate link here with my 80% coupon code: RETAILCAPITAL, valid until this Sunday 6 pm ET. This is the biggest discount ever made by Apex!
Nice write up about vwap framework. When I look at vwap with sd bands I use it as a way to frame current market bias. When price is auctioning above the vwap, I consider it a premium market and know participants are willing to pay up for potentially higher prices. When we are auction below, I see it as a discount market. When we see price rotate between 1st and 2nd sd, we are seeing active value repricing. When we frame developing vwap with previous days ranges and previous vwap/bands, we can get a real time gauge of how price is behaving.