The Tool That Told Me This Stock Would Rip 150%+

Today, we’re talking about a critical tool for day traders…

I talk about it a lot, and it’s one of my favorite ways to spot breakouts.

Why do I like it so much?

Because the rewards can be huge!

And knowing ahead of time that a big move is likely is half the battle in the trading game.

Speaking of knowing ahead of time, do you know what’s coming for a major AI giant?

Nvidia’s CEO, Jensen Huang, is about to trigger a game-changing event.

Nothing will be the same after this…

Fortunately, my colleague and legendary trader, Tim Sykes, has a handle on it and knows exactly what you need to do BEFORE this happens.

Find out in his video below…

The powerful indicator I love to use showed me ahead of time that a stock would spike over 150%* on Tuesday…

By the way, it won’t cost you a thing to use this tool yourself. It’s available to everyone!

Today is going to be all about Volume Weighted Average Price (VWAP). I talk about it all the time with my students and for good reason…

It’s so simple to use, it reduces your risk, and the potential can be massive.

What Is VWAP?

VWAP stands for Volume Weighted Average Price, and it’s hands-down one of the most useful indicators for intraday traders.

VWAP combines price and volume into a single line that tells you where the average trader is positioned.

If a stock is trading above VWAP, bulls are in control. If it’s below, bears have the edge. That’s the core psychology behind it, and why it’s so effective.

Moving averages and Bollinger Bands used to be hot…

But now it’s VWAP that traders flock to.

And because so many traders watch it, it becomes a self-fulfilling prophecy.

If enough eyes are on the VWAP break, and volume confirms it, that breakout can go vertical.

VWAP Settings and Scan Criteria

Let’s talk about how to scan for VWAP breakouts.

Here are the exact filters I use:

Price range: $1 to $20.

This range attracts short sellers, and when they get squeezed, you get those explosive moves.

True penny stocks are tougher to borrow and less liquid, so I usually skip anything below $1.

Volume: Greater than 1 million shares traded.

More volume = more interest. We need liquidity.

Within 2% of VWAP: I’m looking for stocks that are hugging VWAP.

That “VWAP hugging” action shows consolidation and sets up the potential breakout.

These criteria help me filter down to a manageable list…

Remember, the point of scanning isn’t to catch 100 names. It’s to get 5 or 6 high-quality candidates that we can actually trade.

What’s the best way to run scans like this?

The StocksToTrade platform can run this one and so many more. 

And the best part of all is that you don’t have to reinvent the wheel.

There are more than 40 pre-built scans! And of course, you can still create your own if you want to.

The STT platform also features real-time data, charting, technical indicators, alerts…the list goes on and on.

It has everything you need to stay ahead of the game, all in one place.

Don’t wait! Manage your trade list… and your sanity, with StocksToTrade.

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.

Tuesday’s Big VWAP Breakout

The odds for big price action in ProKidney Corp. (NASDAQ: PROK) seemed pretty good when I saw the following: 

• Positive drug trial news dropped that morning, which jump-started the momentum.
• Volume increased.
• PROK pushed to new 52-week highs.
• The stock started rising above VWAP after hugging it for most of the morning. 
• The stock broke out and spiked for a gain of 165%*!

Here’s what happened:

Trading VWAP Breakouts

• VWAP is where the average market participant is positioned, and when that level breaks, it can trigger a surge of momentum buying (or panic selling).
• Don’t chase breakouts that have already run. Look for those “VWAP-hugging” before a key level breaks.
• Use proper risk management. Set your trailing stop-loss just below VWAP and do it before you take the trade. 
• Scan smart. Too many filters = too many tickers.

My Final Thoughts…

VWAP isn’t some secret weapon…

It’s a simple but powerful tool that, when used correctly, can give you a huge edge. 

But like anything in trading, it’s only as good as your execution.

If you want to go deeper, join our StockstoTrade community. 

We run webinars all day long where we talk about setups like this in real-time. It’s the best way to build your confidence and consistency as a trader.

Register now for one of our free webinars.

Have a great weekend, everyone. See you back here on Monday. 

Tim Bohen

Lead Trainer, StocksToTrade

 

P.S.

Beware the reverse split.

Don’t fall for a false breakout.

Know when to take profits on a winning trade.