1/ The @stockdweebs analysis I did received significant more attention than I expected and there were a lot of questions about what vWAP is and why it is important.
To recap - Stock Dweebs is the 🐐 when it comes to trading.
2/ I have been a part of several chat rooms, paid and unpaid, and nobody comes close to Dweebs in both win rate AND % profit on plays.
If you aren't already, go follow him and read through his "10 Rules"
3/ Here is the link to the google sheet where I did my analysis.
docs.google.com/spreadsheets/d…
Also big thanks to @ArlesGreyDog for doing the legwork. He is the one who originally put the sheet together. I just added my vWAP observations on top of it.
4/ First thing to understand: the only people who can affect the stock price of a company day to day are banks, billionaires, and hedge funds. People with BIG money.
5/ I say day to day because obviously in the long run the business itself will affect the stock price by it's performance.
However in the short term, price aggregates up or down based on when big buyers or sellers step in.
6/ To illustrate, at the moment of writing this, there are approx. 17.1 BILLION shares of $AAPL traded on the public stock exchange. At it's current price, that's just a hair under two TRILLION dollars worth of Apple shares.
7/ The only people with enough buying power to affect the price of Apple from day to day are banks, billionaires, and hedge funds. That's it.
8/ Of course this is not applicable to low float stocks, penny stocks, etc. Those can be manipulated by millionaires or even collective groups (i.e. Wall Street Bets, Discord Rooms, etc)
9/ With that being understood, the next important piece of the puzzle is understanding HOW big money buys or sells stock. For you and I, we can sell or buy in an instant with no material affect on the price of the stock.
10/ For a hedge fund that wants to purchase 10,000,000 shares of $MSFT (as an example) will place a buy order at the "Volume Weighted Average Price"
11/ If you can identify where / when these buy orders are set, it is possible to see both intraday and interday "waves" of buying or selling.
12/ There are a few important places to anchor vWAPs: recent lows, day before catalyst (i.e. earnings, news report, etc), IPO date for recent companies like $WORK, and March lows.
13/ Now for some examples:
$AMAT
This is a great example of interday vWAP trading anchored to march lows.
chrt.biz/AMAT/1678762hc…
Notice how the vWAP, anchored to March lows, creates a strong zone for institutional buying.
14/ Also notice how vWAPs anchored to higher lows create additional buying zones where institutional money is stepping in.
This can be used as a great indicator for swing trades. I have found it is best used for stocks that are already in a strong uptrend.
15/ Next up: $WMT
This is a great example of anchoring before recent catalysts.
chrt.biz/WMT/1678762rcz…
Notice how the price settles right back to the vWAP anchored to Jul 5 (before catalyst) before aggregating higher.
16/ @daily_swings you asked if Walmart was within that 5% zone, the answer isn't as clear on this one. It depends on which vWAP zone you are talking about. It is right on top of the most recent low, however it is still a couple of % above the vWAP anchored to Jul 5.
17/ Goes to show that as great as anchored vWAPs are, they are simply another indicator that must be used with prudence (hence, the 10 Rules set forth by Stock Dweebs).
I bought Walmart calls at today's low because I think Walmart has reason to move higher with recent news.
18/ Next Example: $ZM
This is a great example of anchoring to recent lows. Notice how many potential "buy" zones this identifies as Zoom works it's way up over the last several months.
chrt.biz/ZM/1678762vwk5…
That's about all I have time to explain tonight.
19/ I hope this helped answer some questions. Cheers, and have fun in your journey to financial independence!
Oh p.s. one last example because I mentioned intraday (same day) trading and interday (swing) trading.
Talk a look at $WORK since the dip after earnings (this is a 5 min chart):
chrt.biz/WORK/16787636n…
Notice the "buy" zones when the vWAP is anchored to the day of the dip.
Again, not science, just a good tool to have in your toolbox.
I use @TrendSpider for my charting - I love their software super easy and intuitive.
That being said, no need to pay for a software to be successful at trading unless you want to. Just another good tool.
Share this Scrolly Tale with your friends.
A Scrolly Tale is a new way to read Twitter threads with a more visually immersive experience.
Discover more beautiful Scrolly Tales like this.