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How to use the VWAP for Trading Stocks

How to use the VWAP for Trading Stocks



what is up everybody this is Mike over at Foose alerts today I'd like to have a brief discussion going over a technical indicator that has become more common over the years especially for day traders and that is the V Webb V Webb stands for volume weighted average price and is a technical indicator that we use as day traders on the intraday scale this is something that you know you really shouldn't be using on the daily chart or a longer-term time frame the vo app is specifically used for a stock that has made moves on a volatile level on the intraday scale so looking at the chart that I'd like to use as an example everybody is going to be imn P so essentially don't really care what the calculation is or how to calculate V you app it's something that's irrelevant what it basically means guys on an intraday level is when a stock is trending above the V web it is considered bullish and a move trending to the upside once a stock is trending below the V web the move is considered bearish and the stock is therefore trending to the downside so to look at a really simple example IMM P was a stock over the past week that ripped from a dollar 25 to about two dollars and sixty-five cents in one day this was basically a hundred percent move in one day so looking at the shorter-term time frame on the day of the huge rip you can see this trended the view app and 13 EMA basically all of which day was this of Wednesday from 1 p.m. to basically the close this never really broke the V web I'm so to be trying to short this name guys while it's trending above the V web is usually fighting the trend ideally we'd like to see stocks confirm the move to the downside once they crack the view app which was basically pretty evident going into Thursday i MNP was gapping pre market and then completely failed and broke the V web and crashed to the downside was basically down about 50% going into Thursday but I want to look show you guys how this traded most of the day Thursday as well as Friday you can see that basically we were below the V WEP for most of the morning we basically cracked above it briefly once we cracked 1:30 rip to 1:45 but you can see then on Friday this basically broke back below the V WEP and is trending back to the downside so without getting too complicated that's how you want to interpret it guys the stock that is above the VF is trending the upside a stock that is below the view up is trending to the downside so how you can use it on an intraday level is if you are looking to short stocks that are trading above the V web ideal you want to see them crack below and stay below the V WEP on increased volume and then throughout the day as the stock looks to basically tap the V web you can use that as a resource is above the weekly web as your stop this is a type of trade we like to use for in the Fu's for system which is something that's also included in the Fu's four times three short DVD that's coming out soon the view up has been a contemporary indicator that is being used more and more as day traders so I definitely recommend that if you are an intraday day trader you start to include this in your arsenal


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