In this video, learn how to use VWAP to buy a Pullback in a Meme Stock. Our proprietary trading firm shows in step-by-step detail how to use an important indicator, VWAP, to enter a hot stock.
View Video Transcriptin this video learn how to use vwop to
buy a pullback in a meme stock hi i’m
mike bellafury co-founder of sme capital
and we’re a proprietary trading firm
located in midtown manhattan and i’m
also the author of the trading classic
one good trade
in the playbook in this video our
proprietary trading firm shows in
step-by-step detail
how to use the important indicator viwop
to enter a hot stock let’s get to work
on sharing these important trading
lessons so
you can grow your trading account
[Music]
this is an archive playbook trade i took
on cloverhealth it is a relative
strength pullback to v-wap setup
so for this playbook strategy the stock
selection criteria i look for
is the stock is showing relative
strength to the overall market
trading at least three percent higher
than hey brandon if i can just sort of
chime in here yeah for context
what’s your experience level uh as a
trader and
how do we know you yeah so i’ve been
trading for about 18 months now i’m
going into my sophomore year of college
i’m 19.
i am a junior intern this is my first
internship
i applied back in mid-february
all right great well congrats on getting
a chance to do your first review let’s
hope
you’re well i’m very excited thank you
now look they don’t all go well
so good so good luck thank you thank you
so
stock selection criteria the stock is
showing relative strength to the overall
market
trading at least three percent higher
than both spy and qqq pre-market
the stock does 20 of its average daily
volume within the first 15 minutes of
open
and if the trade is taken before then
you can use this as a check in your
favor while you’re in the trade
the stock does at least a one atr move
to the upside before the pullback to
view up
and it continues to trade on elevated
are well throughout the day
so the trade strategy for the stock
selection i’m looking for
a strong opening drive and after the
stronger opening drive the stock pulls
back to v-wap
the stock holds v-wap and stuck still
stalls out
and shows the change in character
compared to the pullback to view
hey can we just go back to the stock
selection slide
yeah so walk me through why you think
these are important
yeah so for the first um part where the
stock is showing relative strength to
the overall market trading at least
three percent higher than both spy and
qqq
looking at my stat my statistics through
trader view i find that i trade stocks
showing relative strength the best and
when the stock
is up um you know more than three
percent to the overall market that’s a
great indicator to me that it’s showing
relative strength of intraday
as far as the volume goes um 20 average
volume within the first 15 minutes
it’s just showing me that the stock is
in play and if i’m taking the trip
before then then i can use that as a
check in my favor i can take off risk if
it’s
i’m not doing 20 in 15 minutes but i
really want to see elevated our wall
come in
early in the day off the open and at
least the one atr move to the upside
before the pullback to view up i’ve been
looking back
historically at these stocks and this um
certain setup
and i find that you know when a stock is
showing relative strength and if you
could do an atr move off the open
and pull back and hold view up then it
can set up for a
two or three atr move during the day or
at least it has a better chance
and are you scanning for this or are you
manually looking for these stocks
so as of now i’m manually looking for
these stocks but i’m currently working
with a few other interns and we’re
creating um a scanner for this good
awesome
all right great so for the trade
strategy for the stock selection
after a strong opening drive the stock
pulls back to view up
the stock holds a v-wap and then the
stock stalls out show the change in
character compared to the pullback
for volume i want to see shallow volume
on the pullback to view up
increasing volume on moves higher
increasing volume on breakouts and
volume starts
to coil and consolidation and increases
on the breakout
for the tape a few things i want to see
is clear institutional activity around
view off
so large orders going through on the ask
large size sitting on the bids tape is
heavy on the bids
and any seat below v-lop and bids
immediately reclaim
i was talking to dr us a bit and you
know we talked about how
if a stock is in play there could be a
lot of institutional activity going
around on around v wap so
that’s something i look for on the tape
if i can spot large block orders going
through on the time and sales or large
bid sitting
on the level two that’s something i
definitely look for and we might
explain the reason for that so let’s
just say
you are an execution trader at an
institution
the way that you’re judged is
how well you buy the order relative to
view up
so if you had an opportunity to buy
closer to view up and you pass ended up
buying
you know much higher than that then
you’re going to be in a little bit of
trouble and so there there could be this
there can be this fear when the stock is
around view op that you
need to start filling your order
you’re not going to you’re not going to
take a chance to see if it’ll get below
it and try and buy it cheaper
because you may have to buy it a lot
higher
and so that that is one of the things
that execution traders at institutions
are judged on
how well did they buy the stock relative
to viwa
and that’s why that could be an area
where you start to see
a lot of institutional buying exactly
so other things i like to look for is a
hot sector so look for other stocks in
the same sector receiving price target
upgrades and strong pre-market movement
the overall market is strong short
interest is in my favor
and out the money calls coming in via
option flow so
um just for perspective on this trade
this was you know hot sack there this is
falls within the wsb or meme sector and
these stocks were quite hot this day
and the short interest was in my favor
this day as well if you want to learn
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the a plus trades will include
a very strong opening range breakout
shallow volume on the pullback to v-wop
overall a hot sector the overall market
is strong the stock is leading the
sector and a high short float
yeah can we just spend a little bit more
time talking about the meme stocks
and you talking about
uh how much this is like one of the meme
stocks
is this definitely a meme stock i would
say so
um you know at first back in january the
stock definitely wasn’t running as much
as the other ones like amc and gme
and we saw later into the cycle we saw
more of a rotation
into more independent stocks that
weren’t running
as much at first and clov i’m going to
talk about it later on the sentiment
indicator this was definitely a stock
that for about a day or two was showing
a ton
of um you know a lot of people were
talking about it and it was definitely
like the most talked about stock on wsb
for about a day or two
which caused a lot of volume to come in
yeah so usually when a sector gets hot
even a meme sector which isn’t really a
thing
[Music]
but you know usually we talk about
sectors we talk about
biotech stocks or tech stocks or chip
stocks
or oil stocks that that’s a sector
when or marijuana names
or electronic vehicles
electric vehicles so those those can be
sectors get really hot and generally a
general principle is
when a sector gets hot there
are different tiers of stocks
for those sectors so there’s the first
tier stocks
the ones that go first the ones that
most people are looking at so
for let’s just say meme stocks was a
category
amc and gma would be first tier stocks
the head of the snake
then there’d be second tier stocks then
there’d be third tier stocks then
there’d be fourth
tier stocks this happens time and time
again and what happens is
the first tier stocks go and then
traders look for
stocks like them and then
second tier stocks go and then because
the first tier stocks and the second
tier stocks have gone into sector
traders look for third tier stocks and
then they go
and then because first year stocks
second tier stocks and third tier stocks
have gone in a particular sector
traders look for anything like them
which tends to be fourth tier stocks
which tends to be stocks that aren’t
really like them at all by the way
and are the first to get in trouble uh
when the sector starts to to roll over
and
tend to be the ones most likely to go
back to from where they started
so this you will see
as much as this happens in meme stocks
this can be translatable
to any hot sector this will happen many
times during marketplace
when money’s rotating in and out of hot
sectors and so this general principle is
great to take away
as a huge learning lesson okay yeah
thank you
and that makes a lot of sense and you
know with that being said
this was definitely you know either like
a tier three or tier four
like stock in the sector definitely
wasn’t like a one or two
a very strong opening range breakout
shallow volume on the pullback to viwa
hot sector high short float leading the
sector and market is strong
so potential reasons to sell
change of character within the stock
volume is against me drying up with
price action stalling out
breaks level of consolidation or
pullback news against me on the stock or
the market
stop is hit and one other that i would
like to add is i use the nine
ema on the two minute chart as a
trailing stop when my trade is moving in
my favor
yeah and just suggestion for you as you
get more experience
defining for you what change of
character within a stock means
is is something to be really thinking
about and the more specific you can be
it’s going to be different for different
traders
but you want to be able to in your head
know very
very succinctly you know the three or
four change of characters within a stock
that you can identify that are important
to you are
and uh be specific with that as opposed
to
you know change of character within a
stock can mean a lot of different things
and can confuse you in real time but
uh unable to
[Music]
push above a high and then make a
a a lower high that’s something that’s
specific
you know or unable to push above a price
for the first time uh on
elevated volume uh into the move that
that’s a specific
change of character within a stock that
can mean something to you
so work on that work on that work on the
sub
set of that list okay yeah that sounds
great so
yeah as of now and i can definitely
specify that right now i’m looking for a
change of character
more so yeah so more so in price action
it could be
like the first lower high made after a
momentum move to the upside and a lot of
time i’ll look for a change of character
in the tape
perhaps the tape’s slowing down after
momentum moves so that’s definitely
something that i’ll specify
so the trading plan so if a stock is
showing relative strength by fitting the
stock selection criteria and pulls back
to v-wap after a strong opening drive
this is the strategy to trade
i’m looking for the stock to pull back
the v-wap show a change in character
after the pullback
and i’m waiting for some sort of change
of character to reveal itself at v-wap
to enter off this can be a change in
character on the tape
price action or volume and lastly the
trade must have a favorable
risk to reward setup that makes sense to
me
so big picture on this day the spy
opened slightly green
it ended up flushing a smile off the
open consolidated for a few minutes and
then once it dropped below v-wap it
flushed
consolidated for about 45 minutes below
view up rejecting view up at the highs
and then it flushed down to about 12 30
in which buyers started stepping in
and then it rallied above you up and
then started consolidating above you up
for the rest of the day
so technical analysis on the daily chart
for clov
you can see on this day it’s just clear
it really popped this was a day that
it was opening up around all-time highs
and then off the open and made all-time
highs
and at this point when i took the
screenshot was up 76
on the day so strong gap up it held the
gap up
and had a strong opening drive and
trended
early in the morning so here’s the 30
minute technicals
just zoomed in a bit more but you could
basically see the same thing so on this
one you can see there was a bit of day
one action
strong trend day on day one but nothing
really compared to day two here where it
gapped up
in the morning pre-market strong opening
drive off the open
squeezed up to about 25 in which
rejected pulled back a bit
and then found some support in which it
started trading higher off in the
afternoon session and this is the
intraday technical analysis i had
so something that i would like to point
out about this is the pre-market
movement and this consolidation had for
about an hour pre-market
this was actually a stock that i had on
my watch list at first going into the
open but it wasn’t my main watch just
because
of how much volume i knew it was doing
and how overcrowded it was i realized i
don’t trade those stocks the best
but about 15 to 20 minutes before the
open i noticed the consolidation range
it was forming pre-market
and it got me really interested in it
because i i really
um trade consolidation ranges pretty
well and i can gauge my risk
on them well so this consolidation range
pre-market made it very attractive to me
then it had a big move off the open it
may not look big but this was about um
like a 15 to 20 move off the open pulled
back to v wap held v
made another move up consolidated
below 18
and once it broke 18 it really just
squeezed to 25 in which it put in the
front side move and then made it started
the backside move
i like you noticing that tight
consolidation in the pre-market that’s
actually a really good one
that’s a really good visual example of
tight consolidation what’s happening
there
is people are shorting a bunch thinking
this is up too much
and people are buying a much thinking
the people that are shorting are going
to get squeezed and that this has got
more to run they fight
there’s a winner if it gets above that
resistance area and the pre-market the
sellers are going to cover new buyers
are going to come in
and the stock is going to push higher
so that sideways action that
flagging action that consolidation
action
with time over time
and and how tight it is is a good visual
pattern you know you’re not just getting
a lot of time
where the stock is bumping up against
resistance
and pulling into support you’re getting
a tightness
of that resistance and support
and when you combine that with a stock
really in play
you’re potentially going to get a big
move and then you do get that
right on the open as well to a lesser
degree
but those are good patterns to be
looking for as
moment for for momentum trading and and
your right to use that word coil that
that is
creating a coiling effect those shorts
are going to have to cover
the people that aren’t yet long are
going to want to get in the people that
are long already are going to want to
buy more
momentum players with some big money are
going to want to keep driving this
higher
the technical traders who buy because
the stock is going higher
are going to buy higher and so that’s
that’s what’s going on under the hood of
of this price action
yeah that sounds great and i would also
like to note that um
after this strong opening range breakout
on this pullback to v-wap it also
comes in sync with this consolidation
high that it pulled back to
so it just it just made a lot of sense
and it was really
easy for me to recognize this pattern
and this hold of this consolidation hind
view up off the open
so intraday fundamentals
so cov was the most talked about stock
on wsb today participating heavily in
the wsb or meme stock squeeze
coming into the day clov was gapping up
over 40
pre-market showing the most relative or
strength relative to the meme sector
if you want to call it that with a 36.09
short float and being the number one
talked about stock on wsb
it is clear that the intention of retail
traders is to make this the next stock
to squeeze
trading right below all-time highs if
clov broke 1745
there would be no overhead resistance
and they’re very and there may very well
be a lot of short covering
the higher time frame technicals played
a large part in my bullish thesis
so some statistics for this stock
average volume is 85.4 million
our vault on the day was 30.12 times
atr made a nine times atr move short
float was 36 percent
shares float is 112 million and there’s
no information on the institutional
ownership
two things one from yani
uh with his contribution and two from
the past so
good to be checking to see what are the
most talked about stocks
on wsb
and other places that measure sentiment
so good to be checking to see what the
overall sentiment is in the stock
meaning how positive are people about
this stock how much are they talking
about the stock
and starting to play around that data
there’s no one right way to use the data
but you do need to use the data um
and and i’m not going to mandate you how
to use the data because i don’t think
that’s particularly helpful
in terms of teaching but what i will say
to you is
you need to learn how to use the data
and you need to be incorporating into
this trade
and then the second thing if you just go
back a slide
so you may want to start to get into the
habit of checking to see
what the call options are doing
uh as you’re swatching this coiling
effect
is is there a ton of call buying
at much higher prices and yani is
challenging you to be thinking about
that
there’s certainly edge to be looking at
the ratio of call buying to put buying
uh there’s certainly some edge in a
pattern like this to be noticing that
there’s a lot of call
options going on above where the stock
is trading
and so you know we’ve talked a bit about
in the past about gamma squeezes you can
go
take a look at our youtube page to learn
a little bit more about that i think
that’s
probably a little bit above your pay
grade as a junior intern
but there’s a good introduction to that
on our youtube channel uh recently that
one of the guys put together
so good for you to be thinking about
this
look the way you’re putting this trade
together is terrific you’re doing so
many things right
uh what my suggestions are
you know on the margins how you can make
this a little bit better
on the margins how you get a little bit
more confidence in this trade on the
margins how you put a little bit more
risk on this trade on the margins when
you become
a super great trader how you express the
trade better
i’m not making these comments suggesting
that what you’re doing right now
wouldn’t work in of itself it would
i’m making these comments as a
supplement for you to think about as you
get more experienced
okay um thank you yeah i know that
sounds great and
thank you yanny for that yeah definitely
looking at call options and especially
pay attention
to the help the money ones that come in
because without the money call options
that come in that can definitely trigger
a gamma squeeze
if there are a ton of them coming in at
large rates so
thank you and as far as the data does go
with this
i was sort of just looking at and you’ll
see in a few slides from now
how much it was talked about relative to
the short float
um it was clear that these um retail
traders were trying to pump this up and
with the short float i
sort of just assumed that you know it
can definitely cause a squeeze
this is the wsb ticker sentiment so
um swaggy stocks this is something i
used to gauge with sentiment and you can
see
clov on the far left by far the most
commented and talked about positive
sentiment
just commented stock in general on this
page on the day
and it was by a far shot as well it
wasn’t really close
so something else i do want to point out
as well is this day
it was clear that there was more so of a
rotation into these
tier perhaps tier two and tier three
sector rotations as you can see the top
three are clov
bb and clne um compared to gme and amc
which were down a bit more so
that rotation that we were talking about
earlier definitely came into effect to
stay
yeah so swaggy stocks is a good
third-party website to be checking into
like how you’re pointing that out and
then as some of you
dive a little bit deeper into using data
through our automated division there is
data on sentiment there’s sentiment data
that
you guys can take a take a look at
and play around with that is even more
sophisticated so
i like you starting here i like you
looking at this
for where you guys are at now and just
sort of know that
if you wanted to get more into this
there there are data sets
that you can get your hands on and you
can start to back test
to give yourself a little bit more edges
that sounds great yeah for sure and
that’s definitely something that i would
like to look more into
in the near future so this is the trade
management on the trade
so i do want to note that vwop was
coming in
right below my entry as you saw on the
intraday chart but my entry was
i got long once clov seep below v op
reclaimed
offers lifted 1650 and the tape started
speeding up to the upside
my risk on this trade was 16 so if
offers drop below 16
i was getting flat that was my hard stop
on the trade
so exit took off size once spread
started getting wider near 18.
asks were heavy and when asks did lift
18 they were not able to hold above
and then this was a clear level of
intraday resistance that was coming in
which led to this consolidation
at its size there were large size on the
bids at 17
large block orders were being done on
the ask at 1735 in 1736 i can point this
out when you look at the tape but
you know at this point because i did you
know it may not look like a big move but
this was about a 10 to 15
move and i did exit a bit more than i
wanted to
looking back on the trade so i was
looking for you know
you know an area to add more size and
then when we pulled back to 17
you know it was clear that buyers were
stepping in whether shorts covering or
more people buying and there were
large black orders being done on the
time of sales around 17 35
and 36 so i added more size there we
started to consolidate a bit
so this part is more important this is
actually something that i talk about
with my senior intern and it’s the see
it moment during a trade
and the seated moment for this trade was
when bids got above 18 with
speed and skipping numbers to the upside
on the tape with heavy volume coming in
and that’s when i added more size on
this trade that’s when i felt like i was
in the driver’s seat on this trade
um it was a clear change in character
throughout this consolidation because
bids were never really getting above 18
and if they did it was just for a few
seconds
this time we had volume coming in and
bids were clearly holding above 18.
so exit i scaled out into strength
offers were not being able to hold
above whole numbers and weakness coming
in at 20 right here
um and then i got flat into buying
exhaustion and offers dropping 23.
that’s where i got flat so i do have a
few areas i can show so this is going to
be
my entry my entry comes in at
9 43 15 so as you can see right here
stock is pulling back
at this point i’m watching the tape and
it’s stalling out a bit
i’m just not seeing any you know clear
confirmation that it’s holding yet
now that it’s stalling in the mid 40s it
did see below view up a bit and
immediately reclaim so that’s something
that i’m keeping in mind
and it’s just trading at the low 16s
starting to come up a little bit
and then right here you know we’re
starting to see a little bit more speed
on the tape to the upside and now there
are right there there are
a lot of these block orders being done
on the asks
telling us that these buyers are
initiating the transaction and that’s
you know a bit of a change of character
than i saw so this is where i entered
and now we have a lot more of these
borders going through on the ask 12 000
shares
i mean that’s something that i saw
changing this candle from red to green
and at this whole time my stop was below
16.
and i make my last entry in
one second and right here is my last
entry
and we get a bit of speed on the tape if
i skip forward a little bit
you know it was showing a little bit of
weakness at first when i was rejecting
the nine
ema
then it was coming up and then if we
skip to about
yeah like 440 here we started moving
higher and then we came into
this level of 1745 which acted as a bit
of local support
and then once we got here i took off
about 10 to 15 percent of the size i had
on
and this was just to cover my risk to
the downside so the trade wouldn’t go
against me
there was a lot of sides at 50 that just
got decremented with a lot of is going
through on the ask
and then if we skip forward a bit
so when there was weakness coming in i
made another sale
up at 10 00 yeah 1008 over here so at 9
51
10.
and then i’m just going to go to the
area where i added size on
so on this pullback right here to 17
there were buyers definitely stepping in
and this was a pullback and on this ad
alone i was risking 17 on this ad
and i ended up getting filled around
1735 i believe
so as you can see there are a lot of
block orders now again going through on
the ask
so eleven thousand shares five thousand
five thousand
two thousand and i was just seeing a lot
more
than shares being sold on the bid
and again we’re coming in and this is
where i added
let me skip forward a bit
we did end up pushing up and then the
stock approached this upper end of this
consolidation around 18.
so then if we skip to the see it moment
and where i added size above
18 it’s coming in more around here
so this is the tight range of
consolidation that we were talking about
and now the stock is approaching the
upper end at 18
and then this was to pull back over here
that i added on
so you can see there’s a lot of size at
18 right there and it’s just rejecting
it’s gotten above 18 it just isn’t held
above 18.
wicked above 18 it just hasn’t held
above it we’re testing
17 again 18 we broke above 18 with speed
and then the bits got above 18 and
that’s where i added
i ended up actually taking it off really
quick because asks quickly dropped below
18 and then i added it back again
and then we really just moved higher
after that
so two things so as that stock is
getting
towards 18. you want to ask yourself
what do i need to see
as it’s getting closer to 18 that’s
going to make it this time actually get
through 18 as you can see
i mean it’s wicked above 18 but it
hasn’t really been able to sustain above
it so what do i need to see
below that 18 resistance level that’s
going to tip our hands that it’s
actually going to be able to get up
there and so what tends to happen
is that the buyers slowly creep up and
create bob
closer to 18.
and so hey maybe you didn’t notice prior
to a certain point
that 90 cents
had a had a stubborn buyer and then now
maybe you do
you want to start to be sitting there
saying what do i want to see before
we get above 18 that’s going to give me
evidence it’s going to bust out above
18. and the other thing you want to be
asking yourself is
what do i need to see above 18 that’s
going to confirm for me that this is
more likely to actually
be real and have that move above 18.
is it price has it not gotten to a
certain price
when it’s ticked above 18 is it i want
to see it hold
above 18 is it i want to see it hold
above 18 and then do so for a period of
time
but you want to start in your head
develop
the scenarios that are going to give you
that evidence that this is more likely
to go up it doesn’t have to be that it’s
definitely going to go up but you do
have to start concocting
and game planning in your head this is
what i want to say
this is what i want to see before 18.
okay wow i’m seeing that i didn’t see
that before wow it’s now more likely to
bust through 18.
look at that and then oh what do i want
to see above 18 okay i’m seeing that
now i’m starting to see that okay that
is one of the things i game planned okay
now i need to have a little bit more
risk on
and so those are two things to be
thinking about yeah
that’s a great point and i definitely
need to work on you know what i can see
below 18
um that can signify that this can really
go once it gets above as far as over 18
i really
i noticed that on these wicks above you
know bids weren’t
holding above 18 for more than five to
10 seconds they would immediately drop
and after i saw that the bids were
holding and it was speeding up the bids
were skipping
and it was holding for 15 to 20 seconds
that was definitely a change of
character to me in my eyes
so if we just go to my exits so i can go
over
so over here once we broke above and we
were getting to hive day i ended up
taking off
a little bit of size just to take off
some risk
and really it was showing a little bit
of weakness at first and then it broke
through
and then also something else that i want
to point out out throughout this trade
is that i noticed really above 18
even though it was going asks were super
stacked at really every
psychological level you can get to but
it was breaking through so that’s
something
that i definitely noted and i thought
even though there were a lot of sellers
here
the buyers were just taking them out or
either the offers were lifting or they
were getting decremented
over here at this point we ended up
going all the way up to 20. and i was
talking to a few traders while i was in
this trade and we were discussing it and
we really thought that
you know 20 would be like the best case
scenario like if it got to 20
i wouldn’t like imagine it would but if
it did then i thought you know that was
really as high as this can go
so once we just came in came in around
20 i took off another
10 or so and at this point i was really
just scaling up 10
when i saw weakness
and then my final exit was coming in
around 48. so at this point this is
something i want to point out before i
go to my exit is that we got this
consolidation
um around 20 and then this is an area
that i definitely could have done better
in in this trade
i could have definitely added size above
20. i feel like there was this
you know type consolidation you see it
on the one-minute chart down here and
then once we broke above
2030 we really started going and that
could have been an area where i could
have added more size on risking
below 20 which led to this
very large move up i still had size on
at this point
and i took the last bit of size off
coming in once once these offers over
here
after this parabolic move up after these
offers drop below 23.
some people focus a little bit more yeah
i mean i do think these
stocks tend to end with a parabolic move
so you want to
yeah and i ended up getting flat there
you basically these irrational moves to
the upside
tend to end with irrational bigger moves
to the upside than
yeah anybody had thought so that that
the idea of saving something at least
for
uh you know a really steep move to the
upside makes makes some sense for
a reason to sell yeah and that’s exactly
what i did it was it was about
10 to 15 percent of the size i had left
so it wasn’t a lot and
something i can work out maybe leaving
about 20 size left
and then i ended up getting flat on that
break below and then it ended up running
another dollar too
about to 25 so this is something that i
want to point out so i took four other
trades on
clov on this day so before the playbook
trade i took
i tried it um i actually tried it three
times
um taking it long off 17 and this
consolidation period before it dropped
and then it immediately reclaimed
whether it got long
um all three didn’t go anywhere and
these were just small winners
so these were more moved to move trades
and i was getting in at the bottom of
this consolidation and i wanted to see
the breakout
it just never happened so i got out of
these for you know small wins and nearly
break even
and then after the playbook trade i
opened two more trades on clov
taking long once at v wap and once at
low of day the first trade-off view up
i’m okay with but the second one is
outside of my playbook i shouldn’t have
tried
catching the bottom on a clear downtrend
both of these trades were about a 0.7
hour loss
so this trade over here you know i could
have realized that this move to v wap
was a bit violent and steep and this can
be something i can work around in my
playbook on these pullbacks to view up
they need to be more gradual moves and
um
than um flushes down to view up like
this one was
and you know that’s definitely something
i can look at and add
um and then this trade i i just think
this was a portrait and probably
shouldn’t have tried off low of day and
after this i was done
a really good exercise for you guys
is not to be thinking about these trades
based on your p l
so you don’t want to be thinking about
how much money you’re up or how much
money you could have made
in your review you want to go back and
say
how well did i execute on this trade so
how closely did i get it to the right
price when i wanted to get long how
closely did i get it to the right price
when i want to sell and you want to go
look at these executions and judge
yourself
very much on that that that’s going to
make you a better trader as opposed to
lamenting you should have made more
money i don’t know what that means i
should have made more money
the way that you become a serious big
trader is
being real uh
diligent here on this page about your
executions
and look you’re just you guys are a
little bit newer so it’s going to be a
little bit harder for you to do
but this is where you want feedback the
most
and this is where you want to spend a
lot of your time reviewing
don’t be glossing over this getting
these executions
right makes a big deal i was actually
talking to
seth about this we we have this
signal that we developed internally
that we combined with the way
seth expresses a trade with edge
and the signal of itself does just fine
the combination with the expression of
trade
it does so much better and then there
was a
senior trader screening above
the combining of these
that made it even even better and so
people often talk about
edge is just their setup yeah so you’ve
done a nice job
laying out a playbook trade which is a
setup that has variables
there’s a lot of edge and what needs to
be a big part of your playbook as well
is
your edge and execution
your edge and expression of trade
and so we’ll we’ll talk as you guys
get a little more experience we’ll talk
some more about that all right uh let’s
get to that
last slide so this was the last side so
the trade review
so overall i would say this was in a
setup the setup fit all my criteria and
shows relative strength
the pullback to v-wap was clean and easy
for me to gauge
the only thing that i did not like was
how much volume was being done and how
overcrowded
clov was statistically stocks that trade
on 2 to 15 million volumes a day i have
the most success with
clv traded over 700 million volume today
which is much higher than i’m used to it
felt overcrowded which made it a bit
harder for me to read the tape
so a execution i i have very i’m very
happy with my entries
price i was risking areas i added size
and exit selectivity i’m quite happy
with my sizing which is something that
i’ve been actively working on
before taking this trade i categorized
it as a b trade a plus set up b
trade due to the stocks fundamentals
more specifically the volatility and how
much volume was being done
on b trades i like to risk 15 to 20 of
my daily stop
and i risked 15 of on this trade which
i’m very happy about
adding size i’m happy with how i added
size on the retest of 17 and then the
break above of 18
but there was a great opportunity to add
size on the break above 20 which i
didn’t take advantage of
i’m a bit disappointed in that and we’ll
be rewatching the tape to see how i
could have taken advantage of that break
of 20.
and then overview overall very happy
with my trading id and execution this is
a trade that i’ll look to replicate in
the future
both with the um trading idea and
execution-wise
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