We all know I talk about day trading a lot…
Especially now, as day trades and penny stocks have been an excellent hedge against the wild swings in the broad market.
Tons of high-quality setups wait for us every morning.
To see what I’m talking about, join me every morning at 8:30 AM for Pre-Market Prep, where I walk you through them and take your questions.
And Mondays, in particular, have recently become my bread and butter trading window…
Why?
I discovered that Monday mornings present a unique pattern that doesn’t exist at any other time during the week.
This Monday setup has brought 100%+ gains…in just one day!*
I’ve studied and perfected this trade, and now I want to share it with you.
Learn it for yourself in my video tutorial below:
Now, when I talk about day trading, I usually mean going long, or buying a stock.
And those trades continue to deliver big wins…
Shorting can also be a great strategy in this market, as long as you know what you’re doing.
Right now, the best shorting opportunities come later in the day…
I discussed this in more detail on Sunday night during my new live stream, Sunday Market Brief.
I hope you’re tuning in…It happens every Sunday evening at 7 pm ET.
If not, don’t miss next week’s broadcast. I’m keeping it real, taking your questions, and getting you ready for the trading week ahead.
Tune in Sunday at 7 PM ET and start the week with a leg up!
Table of Contents
The Late Day Fade
One of the reasons I love the VWAP hold pattern is its versatility.
This is one of my go-to patterns, especially for afternoon trades…
And if you’re shorting, this setup can be powerful.
Be warned: shorting in the afternoon is dangerous if you don’t have a solid plan. This pattern gives you one.
We’re typically watching big movers that start to consolidate midday.
The band around VWAP becomes your channel for entries.
On the short side, you’re watching for a clean breakdown below the band.
If it breaks down, that’s your short entry, and you use VWAP as your risk level.
And if it reclaims VWAP after your entry, you stop out. Simple, controlled, and disciplined.
I’ll use a recent example to explain this further…
Step One: Start with the Daily Chart
Aptevo Therapeutics Inc. (NASDAQ: AVPO) is a stock that’s been a disaster for a while.
It gaps up, then fades…over and over again. It’s a textbook junk penny stock whose price action continues to repeat itself.
So when it gapped up premarket on April 21st, I knew to start watching for the fade.
Step Two: Watch Resistance Levels and VWAP
On this particular day, APVO kept slamming into resistance around $1.30 per share for much of the day. It just couldn’t break through.
When the stock failed to break that level multiple times and then cracked below VWAP into the afternoon, that demonstrated a sentiment shift. That’s where the fade started.
Step Three: Plan the Trade
My short entry point? Right after APVO fell below VWAP.
To make things easier, Oracle had already called the AVPO short that day, with a red entry signal of $1.09 per share. This came right after the stock broke below.
And the risk, or stop-loss level? VWAP. Pretty simple.
By the way, Oracle is the perfect tool for trading the VWAP hold and the other patterns I teach.
If you’re not familiar with it, register for one of our free daily webinars to see it in action.
The AVPO Short Trade
Now let’s get to the good stuff…
Here’s what AVPO did after breaking below VWAP that afternoon.
AVPO Intraday, 5-Minute Candles Chart; SteadyTrade
By the end of the day, the AVPO short returned 45%*!
My Final Thoughts…
Let me be crystal clear: do not hold these trades overnight.
These penny stocks can suddenly reverse course after the market closes, or early pre-market the next day…and you’ll be left holding the bag.
Be disciplined. Use VWAP and key levels to your advantage. Use VWAP as your stop-loss and get out quickly if it hits.
This is a consistently repeatable strategy if you stick to the plan.
Want more setups like this?
You need the right tools and a great trading platform.
My go-to is StocksToTrade, and it’s what I use every single day.
It features real-time data, charting, technical indicators like VWAP, stock screeners, and more.
The StocksToTrade platform has everything you need to stay ahead of the game, all in one place.
And right now, you can get two weeks of both the STT platform and our Breaking News Chat service for $17.
Grab your 14-day StocksToTrade + Breaking News Chat trial today for only $17.
Have a great day, everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade
P.S.
- Wanna learn more about managing your risk? Check out my blog post.
- Find out exactly why volume matters so much in day trading.
- And float matters too. Learn how to use it to your advantage.