Transcript for:
Trading with Anchored VWAP

I want to know what is the trading tool that gives you the absolute truth in the markets. Well, I think you know where you're going with this. First and foremost is price. The most important tool that you can use in addition to price is this is Brian Shannon, also known as the godfather of anchored VWAP, the secret trading tool of Wall Street and it has made Brian millions in the markets. He describes it as the only tool any trader will ever need. Price, volume, and time are its components. I am a diehard anchored volume weighted average price. What is it about the anchored VWAP that really makes it that go-to tool for you? You know, I kind of refer to it as the ultimate sentiment tool. You can hear people talking about, hey, I'm bullish or I'm bearish. What it tells us is the absolute truth of who's in control, buyers or sellers, from any point we choose from. Yeah. One thing I did want to touch on is in terms of uh the algorithm. I heard you mention in terms of the the trial GameStop. Is it Ken Griffin, right? Correct. What was it he said? Ken Griffin is the CEO and founder of Citadel. Citadel is the biggest market making firm. And Ken Griffin said, "Listen, we know we don't control the markets." Wink wink. He says, "When we get an order to buy a stock, 60% or more of the executions we do are done through program trading, specifically he said VWAP trading." The point is, yes, there are algorithms and the majority of the volume is done with algorithms. You know, everyone wants to be a day trader. Most people fail miserably. I try to dissuade people from day trading. You have to be able to understand the market structure and swing trading I think is really the perfect time frame. What's a realistic time frame do you think for traders today coming into the markets to start getting that consistency down? Great question. So, [Music] the number one podcast in the trading space, the fastest growing, and that's thanks to every single one of you. Before we get into this episode, guys, I just want to ask for one favor. 52% of you aren't subscribe to the channel currently. So, if you can just hit like and subscribe right now, it will help us more than you will ever know. It will help us bring you and continue to bring you the best seven and eight figure traders from around the world. Thank you. Now, let's get into this episode. Welcome everyone back to the Words of Wisdom podcast. We are back once again and still the number one trading podcast in the world thanks to all of you and our incredible guests. We're still in the US. We're doing the massive US tour and that is sponsored by Tradezella, the number one journaling tool for all traders out there. And it's thanks to them we're able to make this all happen. But we're here still in Denver and we're here for one man only. He is the author of Maximum Trading Gains with anchored VWAP. He is also the founder of Alpha Trends. He is a 30 plus year trading veteran. It's the one and only Brian Shan. Thank you, RZ. Congratulations on the success of your podcast. I'm honored to be on it. I absolutely appreciate it. The people at home don't know what we just went through to do that intro, but me me and you know, so we'll keep that between us. But um Brian, I want to go straight into it. I really do. I want to know what is the trading tool that gives you the absolute truth in the markets. Well, I think you already know where you're going with this. First and foremost is price. only price pays. But the most important tool that you can use in addition to price is the anchored volume weighted average price. Price, volume, and time are its components. And those are the three key factors. I'm sure we're going to dig into that a little bit more, but it I you know, I am a diehard anchored volume weighted average price. I love that. What is it about the the anchored VWAP that really you makes it that go-to tool for you? You know, I kind of refer to it as the ultimate sentiment tool. You can hear people talking about, hey, I'm bullish or I'm bearish or, you know, investors survey says this or that. What it tells us is the pro the absolute truth of who's in control, buyers or sellers, from any point we choose from. So, if we anchor from the beginning of the year, for a day or two this year, we were above it and then now we're six days into the new year and we're below the anchored volume weighted average price. We can look at it from an earnings report and say, who's in control? Are the buyers defending that average price? Do they have programs turned on to buy as it comes back to the anchor from that earnings report eight days ago and it becomes support or do we flip from support to resistance and the stock you know falls apart from there? Um it's versatile on you know you can use it on every single time frame. The traditional VWAP is for one day. The anchoring is anything other than the beginning of the day at 9:30 am Eastern for US equities of course. Um so you could do it from a low at uh 2 p.m. Eastern if if you wanted. uh or you can do it from three days ago, three years ago, three months ago and it will give you really actionable not always actionable but a a key level of interest where it pays to study price action a lot closer for a potential reversal. I love this is a lot to unpack there. But we we'll start with something that I know that the audience is very interested in because it's always been the debate that we've come across through a few of our episodes. Price versus time, right? Price versus time constantly. Which one's more important? Which one? But what I loved what you said there is actually the anchored VWAP takes in price, time, and volume. So, an extra step. You know, why is are those three components so important when it comes to trading as a whole, I guess? Yeah. I I'll give you my vote with with a three-word answer. Only price pays. Time. It's important. and and and in in particular I think time frame and understanding the differences of um you know if I say I'm bullish it might be for the next two three days but we're in a downtrend overall when we're in a bare market let's say so price only price pays volume tells us the emotional intensity of how committed buyers or sellers are so what we want to see let's say in an uptrend is volume starts to expand in the direction of the trend the key is though it peaks generally peaks at the turning point. So the stock runs from 20 to 25. The volume on day one was a million shares, million and a half, 3 million, 4 million, and then 5 million. That ends up being a little distributional. And then we start to see the pullback and it might pull back three days on 3 million shares, 1 million shares, 800,000. So volume expands in the direction of the trend, peaks at the turning points, and diminishes on the retracements. and then it might fall into a VWAP or a moving average or something. But time is the time component is, you know, a factor of when were the earnings reported, what what is the beginning of the year? How many days ago was that? Is it still important today? How are we looking at that? And again, most important is what's your particular time frame? If you're a day trader, you've got no business looking at the anchor from 12 years ago. But as an investor, it's really interesting that sometimes or even as a swing trader, you'll look at a stock that went public 12 years ago and you'll see it pulled back five years ago to the anchor from the the IPO and then it went on a 300% rally and then two years ago it pulled back to it again and now we're pulling back to it again and you get those bounces off that VWAP. So it's really a critical t tool to determine who's in control buyers or sellers and it combines all three in terms of uh indic sort of unpacking who's in control. Do you mean in terms of once we're below that it's giving you a notion of what that means and same once we're above the anchor VWAP it giving us a notion of what that means for buyers and sellers. Yeah. If you just talk about the you know the daily VWAP you know starts at 9:30 uh so at 9:31 it's a one minute VWAP. It's only a a full day. Obviously, at the end of the day, 38 minutes into the day, it's a 38 minute volume weighted average price. But what we see there is that if the stock or the market, you know, say we're trading the spy is above the volume weighted average price, it comes down and hits it and bounces again. Well, in my mind, you know, we're an hour and a half, two hours into the day. We we've bounced once from the anchor and we aren't too far extended. To me, I look at that and say the buyers are in control. I have no business selling this stock short even if it's running into uh you know yesterday's lows. I'm not I I'll look at yesterday's lows and say the buyers are in control today but it's running into yesterday's lows. So I want to be tight on my stop here. I want to be aware that it might be time to quickly take a little bit of profit off in this zone. It pulls back to the VWAP and maybe bounces again. Well then I'm still don't want to short it. I'm aware that maybe it's getting a little bit extended, but until it breaks back down, test that VWAP three or four times, breaks below it, and traps gets trapped below it, then I'll say, "Okay, yesterday's sellers are back in control. They're in control for today because the average price paid for the day. We are now below that." As we broke below the VWAP, we know that for a fact that the average buyer today is losing. The average short seller is now in a winning position. So the sellers are in control. Once it breaks down below that, well, now I've got no business being a buyer of it. So that's how we can look at it on a daily basis. But the same psychology applies to, you know, the last 5 days, the last month, the last year, whenever we approach those key levels. Let's take a break for a minute there, guys, because I want to tell you about our incredible sponsor, Alpha Prime, the first of its kind in the industry. 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There's you can if you want to be I think a little bit more of a gambler is, you know, the stock is up, it pulls back down to the VWAP and then you stick your bid in right at that VWAP. To me, I don't want to stick my bid in because I don't know that it's support yet. It's definitely the potential to be there and that it's the key level to watch. It might continue back down and just, you know, completely fall apart. Where do I set my stop? How do I manage my risk? If instead it comes down to that VWAP, goes sideways for two or three minutes. Let's say I'm day trading and it's on a one minute chart. Two or three minutes it goes sideways and then it breaks above that high of the last five minutes. And let's say, you know, let's say we're talking about the spy. It might be a 20 cent difference between the low of that little pullback and where I buy. Now I can set my stop 22 cents away, two cents below that low 20 cents ago and then participate in the continuation of that emerging trend for the day. And so you're utilizing this and can be well it can be utilized across all time frames. Yeah, it's no different than the psychology of a moving average. Why does a 50-day moving average often act as support? Well, because you know the stock gets two standard deviations away from it. On the upside, let's say a big institution with 20 million shares says, "Let's sell 2 million shares because we know that it's extended technically. We'll turn on a program to sell 2 million shares. We'll do a VWAP program over the next week, let's say, and as it gets down to the 50-day moving average. Whether we've sold 1.8 eight million shares or, you know, the full 2 million, we're going to turn our program off because most people look to the 50-day moving average as a level of support. So, we don't want to add more supply and shoot ourselves in the foot on the 18 million shares we have that we're still holding. And in fact, what they might do is say, you know, we have we sold that 2 million shares an average of$180 higher. So, let's stick in a bid for 50,000 shares at the 50-day moving average just to show other people that there are still buyers here. We're only buying 50,000 shares back of the 2 million we sh sold, but we're establishing support in that zone. Another aggressive hedge fund might think the same logic, saying, "Hey, we missed the move on the upside. It's two standard deviations or whatever their reason for for shorting is we're going to short it down to the 50-day moving average." So, they add supply, they add supply, they drive it down. It gets down to that level, they're like, "Okay, good. Let's stick in a bid that we we reduce supply from the the long seller. We reduce supply from the short seller. And then we have that that bid for the 50,000 stuck in. And then we have the bid from that uh hedge fund that says let's start to cover in some in here. And we won't cover it all, but we'll start to cover some smart. And if it falls apart, great. Uh but and then sidelines cash. You know, people who read books say, "Hey, the 50-day moving average is support. I'm going to stick in a bid there." I won't stick in a bid yet at the 50-day moving average. I want to see how it acts on a shorter term time frame to say, you know, are we, is this the first test? Do I, you know, I can't say it held just because it closed above it one day. I want to see two or three days of maybe going sideways, a shorter term time frame confirming it. And the same thing as the stock emerges from that 50-day moving average and it actually begins to bounce, I can buy the stock there and I have a reasonable stop underneath that just that most recent low. So now I have my lowrisk entry as the no not as it retakes out the prior high but instead is it's just the profit taking is over. It's rounded out for a few days and the momentum begins again. That's where I want to get in with my lowrisk stop. How important do you believe confirmation entries and and you know essentially confirmation trading is important? It's key. I always say we want to anticipate all potential scenarios and know what our plans are. What happens when it gets to the 50-day? Do I just jump in? No. I want to anticipate that now's a time to really look carefully on a shorter term time frame and then, you know, plan my trade out, plan my ifs, thens and know that I have a plan, not just, hey, it's at the 50, I'm going to stick in a bid and see what happens. That's what unfortunately a lot of people do. So, we anticipate all potential uh scenarios, we observe carefully, and then once we have price confirmation on a shorter term time frame, then we participate. After that, our job is to manage risk. And if we get if the stock drops back down and breaks that most recent relevant higher low, well, our definition of this emerging uptrend no longer exists. So there's no reason to be in it. If the stock does what we think it should do, which is to continue in that uptrend on the bigger picture, well then our job is, you know, for me, I I'll take a third off pretty quickly just to reduce my initial risk, and then I'll start raising my stop up underneath the higher lows for the time frame I'm engaged in, which is typically a swing trade. And would you say that a lot of traders out there would probably have a better time in their trading and maybe even better results if they were waiting for confirmation? Oh, absolutely. I I mean, I'll show you my laptop case over there. I'm known for, you know, don't buy the dip. Um, buy strength after the dip. I see it all the time. You know, people say, "Well, the 20-day moving average acts as support." So, they stick it in their bid at the 20-day moving average and they don't have a stop and it drops to the 50-day moving average. Well, the 50day's got to hold it, so I'm going to double my position here. Well, then the 50-day doesn't hold and it drops to the 100 day and they do the same thing. Now, they're sitting with this massive loss that is completely unnecessary. They're just, you know, sticking in bids at levels that at levels of interest. We only know support and resistance after the fact where we can say, okay, it turned on the shorter term time frame. So now, my first book was technical analysis using multiple time frames. So, what we want to do is get involved in that stock in the primary uptrend. But as it pulls back, we avoid it. As it starts to turn sideways, that's our anticipation zone. That's where we set up our trade. As it breaks that short-term higher high and we have the first signs of momentum, that's where we participate. Set our stop below that low. If it rallies, then again, raise our stop under those higher lows. I don't do price targets. I have I have a reason I have a thought like well it should probably go to here that makes it worth it. But if I buy the stock at 25 and I have a price target of 27 and I sell all my stock has it hit my price target but it hasn't violated higher low the definition of trend on the shorter term time frame. We've still got a pattern of higher highs and higher lows. I might get stopped out at $30.26 three days later and I left $3 or you know 100 I could have you know more than doubled my profit by you know limiting myself to a price target. Do you think that's almost a negative then by just limiting by a price target or do you think it depends on the scenario? I think it's good to have an idea of where you think the stock has the potential to go. That's the basis of a a trade plan, a riskreward to say, I think it's reasonable it can go to 27. I buy it at 25, my stop is $24.37. So, I'm risking uh what did I say? Uh 63. I have the potential to do $2. That's a good riskreward on paper. You know, if we buy it at 25 and it completely goes down, well, it was a theoretical riskreward because there was no reward. It was just 100% risk. Um, so it can be limiting, but at the same time, I think it's real important. A lot of people get married to their stock. Once it starts going higher, they think it's just going to keep going higher. Instead, parceling a little bit out at that level where you think, hey, it's likely there's going to be supply here. The rest of the markets maybe starting to get hit a little bit. Some of their peers, let's say this is a chip stock and and you know, some of their peers are starting to roll over. Well, then at 27 I might say, okay, rather than have my stop based on the higher low on a 15minut time frame, which my stop might be 2635, I'm going to set my stop on that recent higher low on a fivem minute time frame and my stop is now $26.82. So on that, so if I sold a third, you know, pretty quickly, I sell another third, it gets hits that 26.82, 82. My other third the stop will be at where that higher low was. So I've taken So I'm always in a position of strength and I'm not too concerned about well the stock can keep going higher and higher and higher because they typically don't. You know there are stocks that do that and you know that final third sometimes you you might sell it at $33 per share and it's and to me that's a huge victory. I honored my process on those first twothirds. And I honored my process for that final third by not just giving into the temptation of taking the quick profit, but instead being disciplined and raising my stop along the way, but doing so for me in a lowrisk way is the key to everything I do. Other people might be thinking, well, why not just hold the whole thing because we don't have a future. We don't have a crystal ball. We don't know the future. How important is like emphasis on trade management? I think it's, you know, there's a phrase out there that winners take care of themselves. I hate I despise that. I I despise that phrase because they don't take care of themselves. I understand the logic of what they're saying, but if you see that if you buy the stock at 25 and it runs up to 2650 and you keep your stop at 2437, you let that profit go. That's just foolish. That that just does not make any sense. Instead, you have to have a process and say you have to have rules of saying, "I'm a swing trader. I'm not looking for this stock to go from 25 to 50 in the next year and a half. If it does, that's great. I'll be able to catch multiple trades over the next year and a half after these pullbacks and they set up in a low-risk way." We have to say, "Let's listen to the message of the market. Let's not limit ourselves to our beliefs. The market is the master. Let's listen to the message of the market." And that's what I think I excel at is I don't get my ego in the way. I listen to the market and I'm good at translating it for people as well. Definitely. No, definitely. And you can tell just from the detail in which that you're speaking in terms of the breakdowns, examples, etc. The passion that is there for the markets which we'll get into a little bit later. But in terms of the anchored VWAP, is that something that we've talked about time frames universal uh but what about markets? So we talked about stocks but is it applicable in you know cryptocurrency in futures in FX like is there any limitations at all in terms of markets? Today's January 10th. If you take a look at the anchored volume weighted average price from the uh US presidential election, what you'll see is the market went I I wish I knew the numbers, but maybe it's like uh se 68,000 uh and it ran up to 108. And along the way, it pulled back multiple times to the anchor precisely to the anchor from that election. That's a cryptocurrency, right? There's a Bitcoin. Yeah. Sorry. Uh so Bitcoin just absolutely crushing it on there. The problem right now today is that we keep coming down to that and that's at 92,000. Let's say we keep coming down to it. We're making lower highs as we do. To me, it's looking vulnerable that if we break that 92 again, we're going to come down to the next anchor. So I've got all this stuff on my Twitter and that's at 88,000. The next one below that is I think 70. I'd just be making it up, but it's it's there's I've got them listed out. And crypto is really, in my mind, a unique beast that it's the only market I do buy uh dips in because it honors those VWAPs so strong. And a lot of times those quick flushes, you know, to the downside, they'll they'll drive it down. In fact, one of, you know, I was on an airplane. And I had a bid. I think it was at 90 928 or something. And the stock I when I got on the plane it was uh 10 101 maybe. I got down and I I got a looked at my phone and said you bought at 92,000. I was like I got that bid and I looked at it. It was 96,000. So that's the only market where I I buy weakness. Volatility and the strength. Yeah. and and it just has those flushes that are, you know, so volatile that you can like you said, let the market tell you, right? That's what you said. So the mark that cryp or Bitcoin in particular, for example, has told you that that that's possible and therefore you can act on that while the stocks you've seen that it hasn't told you that. So you you follow the plan accordingly. Right? So I don't want to contradict myself because we were talking about, you know, anticipate, participate, and look for confirmation. And we need that confirmation before we participate. Typically crypto, as I say, is a different beast. It gets those flushes lower and I've over the years just gotten some incredible buys off of key views. Now, the thing is I don't, you know, stick in big bids down there. These are, you know, fractional pieces. So, but but there still it's it's great to see it work so well there. And I think it does because it's, you know, it's a technically driven market. You can argue, you know, for ever what the fundamentals of crypto are. Um I really don't know, but it trades beautifully on a technical basis, especially with anchored VWAPs. When you mentioned in terms of having like the next VWAP, next V, how does that work then? Is it different time frames or is it anchored from different points? How does that how does that work? Great question. So, uh, when we have the anchor from the election, I will also have, you know, I I'll have the anchor from the beginning of 2024, which is way down there now. But it will be the most recent big pullback. So, the most recent low. So, if we went from uh, you know, 42,000 up to 56 and then down to 48 and then up to 58 again, uh, then that low down there and this low here at I forget where my numbers were. And so each successive higher important low, okay, is generally what I do there on on crypto. And then that's that relationship between the buyers and sellers from that moment. Yeah. And and and I look at it as, you know, there are levels of interest where we have the potential. They've they've often been defended before. So that makes it more likely especially that you know the first major flush down to the yanker from the election after we dropped from 108 to 92. That one I bought pretty strong and we got a really nice bounce out. The second one I didn't buy as much as I should have because we got a really another really nice bounce. And then actually the third one kind of I think it you know we undercut it a little bit made a lower low and then it ran to 103 or 104 or so in the course of two or three days and then right back down to 92. We're bouncing a little bit again. If we roll over again I think it's a quick move to 88. Incredible. Incredible. Is that how the more times it's tested in a short span of time is that something where you think it's it's going to break? Yeah. So, so there's clues the market gives us is that, you know, for whatever reason, 92 is is the bid level. And I think it's because it's, you know, the anchor from the election because you can't deny how obvious it is that the buyers are just waiting there. Um, and for a while, the first test we, you know, on the way up, we tested it, we rallied, we tested it, we rallied, then we tested it, kind of made a lower high, tested again, made a lower high. So, what that's telling us is that initially 108 was the high. The next low, next high, I'm making this up because my memor is not good on it, might have been 106 and then 105. It tells me the sellers are getting a little bit more aggressive price-wise. They're not waiting for 108 to be tested again, and they're maybe not thinking it's going to break out and just continue to run to a million like people say. Um, so instead we're getting, you know, we're we're we're trying to see how this market can accept the 100,000 price. We've gone, you know, in this band 92 to 108, 100 in the middle. Um, but we're making lower highs. So sellers are getting a little bit more aggressive, saying, I'm not waiting for 108. I'm not waiting for 106. I'm going to let my supply out at 105. So they're getting more aggressive price-wise. Then timewise what we're seeing is as it's going sideways at 92 I think initially it was maybe you know 9 days and then it bounced it came down to it again then again I'm making these up but what you'll see is 7 days 5 days 4 days so there's more frequent so talking about time more so we have price bearing down on it and we have time saying the more times it's tested there's a bid there's biders in there at 92 but they don't have unlimited funds. So the demand in that level, let's say it's I always talk in stock numbers. Uh let's say it's for you know 10 million shares. The first time we come down they absorb 2 million. The next time they absorb 3 million then they absorb another 3 million. So we're you know we've got 8 million. Then we they absorb 750. Then they absorb you know 500. Now there's only 250 shares thousand shares bid left. So that demand is getting chewed up. Supply is getting more aggressive. And everyone looks at their chart saying, "Wow, if it breaks that level, I'm going to short it or I'm going to, you know, get out of my position." Um, so that creates a little waterfall of supply because the big demand is gone. Everyone, you know, is stuck with their thumb somewhere it shouldn't be. And then, you know, we get that quick flush down. And then we often, you know, especially the first time it tests, then we get a really aggressive bounce. Those are those are the ones that I like. Don't know where the market's going next? Stop worrying about your trading. Just get informed on exactly what's happening in the markets and what to expect. From Forex to futures to stocks to crypto. Be on top of it all. That's why tens of thousands of traders are subscribed to Market Journal, a free newsletter that allows traders to keep up to date with the markets every single week. Remember, an informed trader is a profitable trader. 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So, use W for 20% off your yearly subscription or RZ 10 for 10% off your monthly subscription. The link is in the description below. Now, let's get back to this episode. I love that. I love that because that's like the step by step what's going on within the markets, behind the scenes, if you will, behind those candles, that leads to those catalysts, you know, that that a lot of the time when people aren't in the know, who aren't thinking in in the way that you've just described, they panic. Yeah. They panic and and they wonder what's going on. And a lot of the time it's always doom and gloom. You this is the end of cryptocurrency or whatever it may be. Even in stocks, I'm sure it's very similar. But that's why it's so important to have that more in-depth understanding of what's going on behind say an indicator or even the price actions. I I think even before you get to indicators, you know, moving averages, anchored VWAP and that, you have to have a solid understanding of market structure and supply and demand. You know, everyone's obsessed with cups and handles and with heads and shoulders. And if you think about a head and shoulder, you know, everyone's just trained to look at a certain pattern. Very seldom do you hear it explained what that pattern actually is. So we have a stock in an uptrend making higher highs and higher lows and then it comes down. So we have that that high and it comes down to this level. We have a a higher high and it comes down to that level again. So we have maybe a left shoulder and a head, but then we see a lower high and then we break down and we make a lower low. So all we're doing is changing this pattern of higher highs and higher lows to a pattern of there's the lower high. Be cautious. There's the lower low. It broke it. That's the completion of your head and shoulders. It's just the definition of trend has a reverse from higher highs and higher lows to lower highs and low lower lows. And then you have to say, well, is this a trap? Are we, you know, just, you know, like the first undercut of the VWAP from the election at 92 on Bitcoin. It undercut it by about a thousand. spent a half a day down there, rallied back up, and then shot higher. From failed moves come fast moves. It traps in the short sellers, gets rid of the people with their stops under there, squeezes the the the the fresh shorts who were, you know, wrong. And then the people who sold their stock say, "Wait a minute, I made a mistake. I got to get back in." So, we have, you know, supply gone, extra set of demand, shorts covering, longs getting back in, sideline cash saying, "Hey, looks like that was a shake, a bear trap. let's get involved and we get a violent move in the other direction. One thing I love what you mentioned in terms of the head and shoulders is a lot of people just look at the pattern itself and just try and execute based on that. I had someone on the podcast called Axel Rudolph who's part of the Institute of uh technical analysis in the UK. And uh you know a lot of the time these chart patterns independent and retail traders would would uh point it and say that's a retail charting pattern like you know that's why it shouldn't be used that's too basic etc etc. But after having conversation with him, it was understanding actually not only as you mentioned like what does it actually represent but equally as well the data of when to use that like when did this pattern work what conditions were around that pattern to make it work when didn't it work what was missing when it didn't work and so on. So you actually then build your confidence off the back of the data versus the pattern itself, right? Um which I found quite insightful because I hadn't thought about it in that way. And uh plus as I say in you know when first traders start to come into the market a lot of the time they're coming across the head and shoulders the cup and handle and as you said as well and and as we know they'll just look at the pattern itself and just look for that in the markets with no other context. But how important in terms of the anchored VWAP? Is that important as well in terms of data around when to use it or when to take action on on it? It is. So use the same example of the head and shoulders pattern that move. Let's say we uh let's say we went from 40 to the highest high was 90. So we take that the the anchor from that low and you'll see that what often happens is the volume weighted average price will kind of intersect and in fact if you look at Bitcoin right now it kind of looks like a head and shoulders pattern. We had a funky a funky right shoulder with a little spike to 105 that kind of shook people out. But what you know so right now that volume weighted average price from the election is the neckline itself. It's not necessarily the neckline because you'd have to go like this you know and draw it whereas the VWAP comes up maybe a little bit more honestly to that trend line. So uh it and what it tells us is from that important event the election we we saw a big catalyst. It could have been an earnings report for a stock. It could have been a Federal Reserve meeting five days ago. But we saw an important catalyst in the market that caused a big shift in supply and demand. So what we want to know is the psychology of the participants from that point. How are the longs doing on average? How are the shorts doing on average? Well, as long as we're above that 92 right now where that VWAP is, it tells us on average, everyone who bought on average is B is in a winning position. On average, the short sellers who didn't believe it, they're losing money. But if we break below that 92, come back up and test it from underneath and then break down, then the shorts are really going to get aggressive, I think, and we're going to see a quick move. um not not that it's going to, you know, break Bitcoin and send it back down to 20,000 because again, I'm a swing trader. I'm just trying to look at it in reasonably sized chunks that maybe are a couple days to a couple weeks at a time. Yeah. Um and and let the the market tell me maybe I'm going to hold a position for, you know, two months because I haven't been stopped out. And it it just blows my mind every day. I'm like, I keep raising this stop. Why am I still holding? I don't hold stocks for two months. What's going on here? but it hasn't told me to sell yet. I love that. And you know, one thing I did want to touch on because I've heard you talk about it before is in terms of uh the algorithms, right? Mhm. And uh I heard you uh mention in terms of the I want to say it's the AMC uh the trial. Yeah, it was uh um GameStop. Mhm. And is it Ken Griffin, right? Correct. And what was it he said exactly? Well, Ken Griffin is the CEO and founder of Citadel. Citadel is the biggest market making firm and they do a lot of uh program trading for you know just order filling and that sort of thing. They're uh agency dealer. So you get an order uh they you know they they buy the orders from a trade from Schwab and that sort of thing. Um so what he was saying is you know they brought him in with a bunch of other people based to Congress US Congress based around the volatility of GameStop and said what's going on here let you know they were trying to point fingers and say this is your fault type of thing and Ken Griffin said listen we know we don't control the markets wink wink um he says when we get an order to buy a stock what you know 80 I I forget the number he 60% or more of the executions we do are done through program trading. Specifically, he said VWAP trading. He said that those VWAP orders can be for a day, a week, a month or longer. So, I've been looking at this stuff and you know, I've spoken to some fund managers that talk about their week-long VWAPs and stuff, but this is the first time you know the guy who control his firm controls 40% I think of the the listed volume in the US and he made in that year that he was brought in front of Congress $4.6 billion personally. Wow. So he's telling Congress this is how we do orders that he says we don't just go and buy 500,000 shares at a time. Instead, if I have an order, let's say I give you an order to to buy 500,000 of GME today, you're going to look at the the volume uh profile of the last not not the volume profile sideways, but the you know the the typical uh trading pattern throughout the day where if 10% of the average daily volume is done within the first five minutes of the day, then the program that you run is going to buy $50,000 of my 500,000. It's a volume participation algorithm. In other words, the point of that is if I go in and buy if you go in and buy 500,000 shares all at once, well, you're going to you're going to jack the price higher. Instead, you're trying to be a little bit more stealthy in saying we'll buy it in, you know, five minute buckets, 10-minute buckets, whatever it means. Meaning, so if the first five minutes are 10% of the volume, we'll do 50,000 shares. If the if if the next five minutes are 1% of the volume for the day, we'll buy 5,000 shares. If at the end of the day, the last 5 minutes or 10%, we're going to buy another 50,000 shares there. So, we can get as close to the average price for the day and not disturb the liquidity and and show people our hand as well that hey, we're a big bidder in here. Instead, we're going to, you know, be a little bit more careful and stealthy about it. I love that. And as you have understandings of different programs and algorithms, what are your thoughts when there the in the in the retail space and in the a lot of the social media space, there's a huge debate going on constantly between there's one master algorithm that's being used in the markets. Well, I mean there are a lot of, you know, there are a lot of volume weighted average price programs, algorithms, programs, whatever you want to call them. There are a lot of programs that you know if you look at pivot point analysis just classic pivot point analysis pivot R1 R2 S1 S2 I often sell you first first day if I get a stock that moves to daily R2 that's often where I sell my first third. There are statistics out there that say 80% of a a trading range of the average stock is between R2 and S2 during the day. So if it gets up to daily R2, it's not likely that it's going to continue to move higher. So I'll either sell it there or, you know, switch to a shorter term trading, you know, momentum, you know, two minute, use the the lows of the last two minutes for my exit uh for that first third or the lows of the last five minutes uh as it makes successive higher, you know, higher close higher bar lows on the fiveminute bars. Um so the point is yes there are algorithms and the majority of the volume is done with algorithms but we know that. So what we have to say is well what are they doing? How can I outsmart them? Not necessarily outsmart them but anticipate their moves. If I see day after day that the market moves to daily R2 and then falls 50 cents or whatever or just stalls out, well then I know that's, you know, a likely profit objective for me. Not price target, but objective where I think it has a reasonable chance to go to now. I'm going to watch it carefully, raise my stop. Um, and the VWAPS, you know, he said we we turn on orders. you know, a a company will report earnings and, you know, Nvidia will report earnings. The stock goes from I'm just making numbers up because this isn't where the stock I think it's 160 now. Um the stock will go from 100 to 120 on a gap and then you'll see over the next three three week months there will be a bidder at the anchor from that because what a big institution will do is they'll say we want to buy 50 million shares of Nvidia but of over the next three months because we think these earnings were so good. So they'll look at their programs and say, "Okay, well October usually does uh 40% of the volume in the in in the October, November, in the fourth quarter. Uh it does 40% and so therefore we'll buy 40% of that order in October." Then they take that and they say, "Okay, the third week is usually 50% of the volume." So they'll say 50% of that month's volume we're going to do in the third week. Then they'll go Monday, Tuesday, Wednesday, Thursday, Friday. The biggest volume is typically on Monday. It does 40%. So they'll do 40% of it there. Then they'll break it down further as we were just talking about saying, well, in the first 10 minutes it does 15%. So they'll buy that. So they're breaking that huge order up over the course of three months and they're not disturbing the market with this big splashing, you know, taking the offer. Instead, they're bidding as it pulls back to the VWAP. So the point is we see the evidence that there are buyers there. And I, as I always say, I don't want to buy the touch of it. They've defended it once or twice before. Let's see if they're still there. If the stock starts to bounce like it did last time, then I want to be involved. I want to get in and see if it it runs from there. A lot of our conversation so far, especially when it comes to programs and strategies, etc. is all based on data. You know, from the sounds of it, like a lot of even the programs based on data. How important is data to a trader success and and the longevity as a career as a trader? Well, price is data, right? And and price pays and volume and time are all data. I mean, it's it's all data driven, data dependent. And you can, you know, you can reasonably, I can't, but you know, a lot of people can reasonably program their own little execution strategies. Uh, I prefer to, you know, look at it, understand it, and to me it's, you know, it's what I love to do. I like to figure it out. Um, even data from the the journaling perspective, like collecting data from the market based on their trades because even like Right. Yes. Even like the pivot points as an example, right? uh you've taken the data point of understanding that 80% of the time once we hit this we start to you know tailor off right we don't go beyond etc um and so that data point you can then take from observing the market collecting that data or getting that data from someone else if it was available right and then you're able to make decisions on your trading off the back of that or from your actual trading uh and the trades being placed you're from reviewing the data that you collect from those trades you can then make decisions accordingly and what I'm getting at is a lot of retail independent traders from my experience aren't collecting data. They're not reviewing data at all and then they expect but yet their results reflect that in terms of they're not profitable. Right? Let me ask let me answer that two ways. Um so I you know when we pull back to the volume weighted average price or the 50-day moving average or a Fibonacci or a pivot whatever it is that's a level of interest that that tells us I want to get interested in this stock because it's at the VWAP from the beginning of the month. Now, I want to switch to shorter term time frames and see if there's evidence. So, that's that's a level of interest, a time of interest like seasonality. The Santa Claus rally with, you know, the the last five days of the year, the first two two days of the new year. Well, this, you know, 24 it was down six days in a row, and then on the final day it was up. So you can say, "Hey, we're in a time of interest where seasonally, typically 70 80% of the time it rallies." That doesn't mean just go in there and buy the market and just close your eyes and hope that it's going to go higher. Instead, you look at the stock or the the market and you say, "Well, it's day one of the Santa Claus rally and we're below the daily VWAP. I'm not buying. That's that's dumb. There's net sellers here. Day two, it's still going down. It's below the one day. It's below the two-day VWAP." And then finally, maybe you get a little bit of a rally, but you have to so so seasonality in terms of time. It's a it's a time of interest versus a level of interest. And earnings reports are a time of interest where you want to say, "Hey, I want to move to the sidelines here. There's too much risk. I I don't know what this company does. I haven't done my research. I don't have a strong feeling." And, you know, the market's a little shaky. It if it gets hit, it could drop 50%. But back to the other part of the data of collecting data and analyzing your trades and your results. That's hugely important especially for newer traders to say you know what from 9 to 930 you lose 80% of the time like slow down just look at the data and there's great tools available that you know sponsor you guys that people should get that and look at them. I am not very good at it. I've been doing it a long I used to keep much better records. Um, it's just a personality trait for me. It's not do as I say, not as I do, but I was the type of student in school who never never had a notebook. I I would just take little notes in the book or underline things, but I never took notes. So, it just never it doesn't occur naturally for me to do that. I you know, people say don't trade your P&L, but ultimately P&L tells you how you're doing. It's the only really objective thing. Um, so I get a lot of feedback from my P&L and I get more feedback though about the market from the market just saying, "Hey, you know what? The MAG stocks, seven, you know, five out of seven of them, I don't know, we have seven of them or eight of them now. I don't know. They're always changing." Yeah. Um, are below their fiveday moving average. So, the odds are the Q's aren't going to move. So, I'm not going to be a buyer of the cues or um you know, the market's below that 5day moving average. Let's take a break for a minute there, guys, cuz I want to tell you about our incredible partnership with propfirmtrader.com. Majority of you out there are prop firm traders. You're using prop firms to leverage your trading skills to be able to get more capital and to be able to absolutely change your life. So, what's important to be able to find the right challenge for you with the best firms and most of all the best prices? And that is exactly what propertrader.com does. Profformtrader.com's allows you to compare prop firms, be able to find the best challenge suited to your trading style, and get you the exclusive best discounts in the entire industry so that you're paying the cheapest price possible for your prop firm challenge. So on propertrader.com, you'll be able to use filters to be able to do that and find the exact challenge for you, be able to find your favorite prop firms. Just look on screen right now. You can see futures firms. You can see CFD firms with offers up to 50% off, which is incredible. And you can also see Alpha Capital there with a one-step challenge with 25% off using PFT1. And there's so many more exclusive discounts only on propertrader.com. It is the go-to site for all proper traders out there. And one thing I'm really excited about that I personally helped to organize was the giveaway of giveaways, the seven figure giveaway. Just through purchasing your challenges for the best price through propertrader.com. Every single week, you will automatically be entered into an incredible giveaway, a collaborative effort across all of these firms on screen. between 100 to 200k accounts over seven figures. It means that one person every single week who's made a purchase through propertrader.com will be getting seven figures in challenges that could completely revolutionize your trading journey. Again, all you do is for any of the firms on propertrader.com, use the code PFT at checkout and you will automatically be entered every single week. The link for propertrader.com is in the description below. Now, let's get back to the episode. And in terms I I loved what you said there as well in particular about the beginner traders. It's so important for the beginner traders, which it is. And you know, one thing we're trying to start to, well, I'm trying to start to do is uh try and emphasize our advice to who it's targeted towards, you know, whether it's beginners, intermediate, advanced, because uh I did a podcast earlier uh on this trip with a guy called Lance. And that was one thing he brought to my attention which I think is very powerful is like we don't have disclaimers on content out there when it comes to who this is, you know, who this tip or this lesson or this advice is for. um you know cuz one thing I've noticed from speaking to trading veterans, verified traders, professional traders, uh is that the the general rules that the retail independent traders know aren't usually the case and and usually are the opposite of what the professional and verified traders are doing to be successful in the markets. Um, and there's a wide range of things, you know, whether it's, you know, only trade one or two pairs or only take one or two trades a day or whether it's only risk one or two percent. Like when I go and interview, you know, traders such as yourself and other traders of the same stature, those rules don't obviously some rules that might still apply, but a lot of the time they're doing completely the opposite. Um, however, if I ask them, they will always say as a beginner trader, you shouldn't just jump straight into doing this. Sometimes they do some depending on what it is. But a lot of the time it'll be like know as a beginner trader you have to start with certain principles get your feet on the ground understand the markets and really you know be more meticulous in your process and and your performance versus how do I optimize and become this million-dollar trader overnight. you know what I what I've just seen in this market recently too you know December we had you know robotic stocks flying cars we had uh the quantum computers well these stocks were trading daily percent ATRS that is you know just for the audience in case of course to the beginners uh what that means is you know the percent range that it had for that day from the prior's close to the next day's range. So you know a normal stock let's say like Apple it might have an ATR of 1 and a half 2%. So you can look at the stock and say generally it's going to you know have a 2% range from high to low during the day. These stocks that were you know flying on the quantum and that they were 30 40 50% per day and everyone just looks at these stocks and go wow it went from two to 10 to 10 to 20 to 20 to 30. I got to get involved. I'm missing the boat here. And what they don't understand is 40% is up and down. And these stocks, you know, in the course of two days, some of them dropped 50%. And you have traders in there that is completely not qualified to trade them. So, everyone wants to trade that shiny one that's making all the money at once. when you've gota, you know, if you're going to trade them, trade them with 10 shares if you if you really feel like you need to just to understand how badly you can get hurt more than anything. Um, and develop your skill set on slower, more methodical type trades. And then those rules for a beginner become guidelines and guide guide, you know, guard rails. They're they're not hard set in stone once you have some experience and you start saying, "Well, you know, head and shoulders patterns don't even make sense. I'm I'm not even looking for those. I I notice them when I see them, but I I never look for patterns. I It's a complete waste of time in my mind." But I notice pullbacks to a important VWAP and then I say, "Okay, now I want to go in there and drill in. I want to get it under my microscope, see what's going on under the surface, and find my edge. Definitely. And you know, one thing we haven't touched on is like where did the the love for trading come from for yourself? It came early on. I mean, I was I was a teenager and um my dad used to watch Wall Street Week and uh so this was this was in the late 70s. Uh my dad would watch Wall Street Week and I would sit down with him and just be with him on a Friday night because I wanted to hang out with my dad and you know they had they they would talk about the markets and my dad would you know dabble in the markets and uh then one day I was watching a local news program and the Massachusetts where this was in Massachusetts um Massachusetts state police were getting this new technology called lowjack to track stolen cars because at the time they used to call Boston the car c theft capital of the world really. So it was big news and and I said to my dad I said hey that sounds pretty cool like is there a stock for that? He said yeah so uh you know I I as a kid I I caddy newspaper roots wash people's cars cut their lawn sell bubble gum at school and you know all anything for a buck. Um the little entrepreneurial drive. So I had like 500 bucks saved up. I said to my dad, "Can we can we can I get $500 worth?" He said, "Well, buy a thousand shares. It's five bucks and you know, you get to keep the profit." We didn't actually discuss the risk, which like I don't know if it went down. Would I have lost my 500 or was he backstopping me? Um, but fortunately, the stock doubled. Wow. And I got to keep the profit. So, I was I think I was 14 or 15 years old, and I just made my $500 go to $5,000. That $500, how long did that take you to I mean, that was probably years. I mean, I you know, just Yeah, it was years probably. I mean, this was again early early. Was that the I mean, the original 500. Was that years? Yeah. Yeah, that that was And then how long did it take to double it? Oh, well, no. To to not double tfold from 500 to 5,000. Oh, really? Yeah. It took 3 months. So, I was looking at that and I mean that was just like I can't imagine, you know, you uh that just completely changed like the whole perception. It just made me think why do people work? I don't want to I that's what I want to do. I thought that's what stock brokers do. So, it was my goal. I want to be a stock broker. And then I did become a stock broker. I was like, wait a minute. I'm just dialing two phones bothering people all day. I'm a I'm a glorified telemarketer. So then I, you know, switched over to trading and then, you know, that's that's what I do. Incredible. Absolutely. That's an amazing story. That is that's absolutely amazing. Well, I'll tell you that the scary part is as a broker um and this was 93 I think maybe. Um I was working in Denver at a company called uh Dane Bosworth as a retail stock broker and I used to read the investors daily. in the back of the investors daily there was an ad every single day for uh you know prop trading basically put up 25 grand we'll give you a half million dollars buying power wow so I was saving for that 25 grand and I got it to like 19,000 then I took credit uh money out of my credit card and I said I'm going to do this and then there was this stock I was trading at that time called Chantel Pharmaceuticals it wasn't even a pharmaceutical company. That's what they called themselves. But they had their product was it it was it was a scam. It was a anti-rinkle product. And they had a great website. They had all these before and afters. And the stock was kind of similar to what we've seen with the quantum stocks that it went from two to 10, 10 to 15. And I was trading it and I felt really good about it. I held a thousand shares over the weekend. And then over the weekend, Baronss did a hit piece saying this this company's a fraud. So I it was, you know, I had a thousand shares at $18 and it opened at like $12 or something. And my 25 was back down to 19 and I was ready to quit that week. So fortunately, I got another loan and then did start to trade, which is completely horrible advice, credit card advances and that. But you know the the the great thing is that I got punched so hard from Chantel Pharmaceuticals that it really made me realize another important uh you know risk management the importance of that and that you know know what you own and if you don't trade it and get out ride it for what it is but if you don't what know what these little quantum stocks are and then Jensen comes in and says it's not happening and they gap down 30% I'm sure there's just all kinds of devastating stories out there. Obviously, you were trading early on there. What was what were you trading at that time? Like what did your trading look like then? Okay, so this was dialup modem actually. It was it was I remember it when you pick up the phone and it makes that sound. Yeah. Right. So when I first started trading it was it was I thought it was really high-tech that they just came out with the 48k modems. Everything was a 24. It was dialup modem. Um, so I was working with uh they were called generic trading based out of New York. They cleared through Spear Kellogg. I mean they were legitimate company but you know when you say prop trade you know you put up the money and that's just a deposit on losses basically. They're like we'll give you a bunch of trading you know money to trade with you'll get a good payout but you still you know I think I brought them some other business so I got a pretty high payout. Um but they still charged a commission. So, you know, they're still making money and they're back stopped with that 25,000. Yeah. So, is it really legitimately a prop trading firm versus like someone like SMB Capital? No, it's not. They didn't give, you know, the training that that professionals like that do. So, it was really kind of the wild west for me, but I had that experience of losing. Um, and I would I would just kind of chip away a little bit at a time. I I didn't I don't think I ever used all the leverage they gave me because I only I traded with them for about a year and a half and I was pretty consistently profitable. Nothing huge though. I I was just I was too conservative truthfully. That's still my problem today. As I I always say I need to work on my greed. Um so I plotted along with that and then I started a day trading office in downtown Denver. So I, you know, I had my license, my series 7 in 63. So I got a series 24 to be a branch manager. So I opened a day trading office, started, you know, doing some educational uh content for the traders that came in because before I did that, the turnover was massive. You would just get guys coming in, put up 5, 10 grand, trade for three weeks, and then they're gone. So I was like, well, we got to keep our customers. How do we do that? Let's educate them. So that's how I got into the education aspect as well to keep the traders around because I was making a commission off of them and I wanted to see them succeed and that their success I had a vested interest in. So that evolved into you know writing books and creating courses and you know doing Twitter stuff and all that of course. No. And when when was it that uh you know VWAP came onto or anchor VWAP came onto your your horizon? VWAP I first encountered I'm trying I I I was trying to go back and and think I think it was about 96 or maybe 98. So I had a platform called Real Tick. I don't know if they are still around or not but Real Tick had a a trend line tool where you know you you hold your mouse down and you you click here and you drag it up there to connect those lows. They draw a normal trend line. Well, this one it was called a VWAP trend line. And I never even heard of VWAP. So, I was playing around with it. I clicked the mouse and I dragged it up. Instead, the line would go kind of up with, you know, up underneath the stock. And as it went across, I noticed that it would bounce from that line. I was like, okay, I got to figure out what this VWAP is because when it bounces from that line, that just seems like easy free money. Um, so then they had actually a VWAP for one day and then I figured out how to change that into I could do it on an intraday basis for up to 20 days. So I started basically in anchored VWAP. So I could change it to eight days if I wanted to start measuring from something eight days ago. And then um TC2000 approached me and said, "Hey, we like what you're doing with your videos on YouTube." um would you would you consider using TC2000? We'll give you a free subscription. I said here I I would if you could build this tool for me if I could get a point andclick VWAP that holds like this. I sent them a bunch of charts. I said that that shows like this and within three weeks they had it. Wow. And they were the first platform that had it the anchored VWAP point and click. So since then now all these other firms have it which is great and it's just exploded you know from that point. And would you say that you know you really helped put it on the map you know on was it something that you'd heard really in the space and then being used? You know I actually hadn't heard of it. Um, it was kind of something that I discovered and I thought it was like a little secret of mine. And then I wrote an article for a company, I don't think they're around anymore, called Trading View. And the article I wrote was Chase the Gap or Wait for VWAP. And that really kind of helped put it on the map. So I I'm the adopted father, I think, of it. It wouldn't have been on TC2000, so I don't know if it then and then other firms started seeing it. So I'm the adopted father. was invented by uh Paul Lavine who is a uh Dr. Paul Lavine. He passed I think in 96 or so. I'm not sure about that but um he invented it and it kind of sat on a shelf really. Um there are a couple people who you know used it and and uh they called it the Midas approach. Um and it was a little confusing. So they wrote a book about that. It was a little confusing. So, I just kind of tried to keep it as simple as possible and uh here we are today. It's on pretty much every trading platform except Think or Swim uh doesn't have a point-and-click one. I mean, to make that happen. Yeah, exact. They I know thousands of people have told them for the last decade that they need it. Interesting. But absolutely phenomenal. One thing you mentioned though in terms of simplifying like how important is it to keep your trading simple, do you think? I love the quote. I have it in my book. uh you know Leonardo da Vinci said simplicity is the uh ultimate sophistication and someone told me I wish I could give credit for but simplicity is the market's ultimate disguise that everyone is always looking for the standard deviation exponential square root of this based on the moon and the the tide cycle and just trying to over complicate it. It's supply and demand. If we can figure out what causes those changes, so you know, is the market driven by fundamentals? Is it driven by technicals? Both. Mhm. I look at them the same way. If I look at a stock that has 20% plus revenue growth, earnings are up 50%. I look at that and say there is a pool of buyers. I know this for a fact. The stock is an uptrend. There are all kinds of growth fund managers that look to buy this type of stock. So to me, it tells me if the fundamentals appear to be strong, I don't I don't make a personal decision about the company and whether it's good or bad or whether their product is revolutionary or not. I look at it and say when it pulls back, it's more likely that it's going to find buyers at that VWAP, at that Fibonacci, at that moving average because there's a fundamental story that all these growth fund managers believe in. So, it gives me a little bit of extra confidence to say, "Yeah, let's get involved in this one or go a little bit bigger, rather." And what are some of the pros and cons you you've recognized over, you know, the the different progression of trading, you know, since you started to to now? What are some of the pros and cons you you've recognized? Well, I think the different kinds of trading, um, you know, everyone wants to be a day trader. Most people fail miserably, and that's just I I try to dissuade people from day trading. you have to be able to, you know, understand the market structure in a slower time frame so you can plot out what you're doing. And swing trading, I think, is is really the perfect time frame. Um, some people don't have time for it, so they should be more investors, but if you want to be involved in the market, then you you let these trades set up. You stalk the trade for three, five, eight days, and then by then you've got a familiarity with how the stock trades. You anticipate what your plan is and then you participate. You can do the same thing on a one minute chart where the stock is up in the morning, it rolls over and drops. And you can be long in the morning and short in the afternoon. Uh if that's the game you want to play, but you've got to be so much quicker in in your thoughts and you have to be so much more disciplined to say, I'm not going to average down. I'm going to justify that I'm going to hold this even though it broke VWAP and a lower low. I think it can hold the 100 minute moving average or the 50-minute moving average and turn into a big disaster for the day. So, you've got to go slow before you can go fast. And is there anything that you've noticed in terms of like like over the years I'm sure that the barrier to entry keeps getting lower and lower? Yeah. What do you think to that? Is that a is that a good thing for the markets overall or is I think it's a good thing. Yeah. Just deeper pools of liquidity, more participants. Um I think that you know a lot of people though it's dangerous or we can you know maybe talk about social media and what the impact there is that you know I whenever I tweet something I think um or you know tell Alpha Trend subscribers something I I really want to be super riskaware and make them risk aware. You think of a doctor's oath which is first do no harm and I kind of feel the same way. I'm not going to tell someone to buy, you know, QUBt after it's run 400% in a week. Instead, I'm going to say lock your stop your stops, know where you're getting out, and most people, it's getting too volatile. Take what you've got and move to the sidelines. So, the barrier to entry is low. Um, but I mean I look at, you know, if I was in high school and I could have put that $500 into the market and traded on a phone, which didn't exist for another 20 years, then I don't know, would it have done damage or would I, you know, would I have been tempted to sell it when it when my $500 became $600? Um, so as you said, pros and cons. Um, you've got these people on Twitter and everywhere else, you know, trying to make it seem as though it's so easy and the stock's going to explode and this should double and this and and people get called to that emotion and that's what they want or they don't want to hear, hey, make sure you know where your stop is. Get out, you know, before it turns into a bigger loss, take partial profits, responsible things. And that's, you know, being in this field as long as I have been as a trader, those are the things that keep you in the in the in the business. What's a realistic time frame, do you think, for traders today coming into the markets to to start getting that consistency down? It's so there's so many variables. I mean, I really can't say for somebody who is, you know, just completely books smart, who wants to figure it out, they're going to be in a disadvantage to someone who's maybe a little bit of street smarts, a little bit of a hustler, who has a little bit of cynicism about stuff. Um, and and a little bit of cynicism, I think, helps because you're not going to buy into the hype. you're going to see that the stock rallied 10%. Now everyone on Twitter's talking about it and the, you know, average person might think, "Yeah, I'm on the right side of it." Whereas a trader who's, you know, been in for eight of that 10% is saying, "Wait a minute. Everyone's talking about this now. It's a little too obvious. It's had a big rally. These people aren't early. I was. Now I want to feed a little bit out. I want to start to be more riskaverse. Set my stop tighter. be ready to lock this gain in because now the average person with three months of experience is talking about this. It's probably game over. So in terms of handling losses like what is your your process when it comes to say have facing any losing streaks or handling losses? Losses really fortunately for me with that Chantel Pharmaceuticals really left a bad bad taste in my mouth. So I have been again I need to work on my greed. I've been saying that my whole career but that's why I'm still have the longevity that I have. To me I you know I really despise losing and and and if I know so again it's understanding market structure. If you know how stocks are supposed to trade and they start to deviate from that and they break you know if you're a trend trader what is a trend? An uptrend is a pattern of higher highs and higher lows. So if you buy it as it makes that first higher high, it rallies up, makes another higher high, pulls back, makes a higher low, makes a higher high, and then it breaks the lower low, the higher low, your definition of trend isn't there anymore. Whether you're on a two-minute chart or a monthly chart, it doesn't matter. Once that trend definition is over, you've got no business being in the stock. So just accept it for what it is, rather than saying, "Well, I like their earnings. I'm going to buy a little bit more. this is probably just a shakeout. Maybe it drops to the 20-day moving average, but I'll just buy more there. And, you know, stop bullshitting yourself. Look at what's actually happening. I've, you know, every time I take a big loss, it's always because I've broken my rules. It's 100% of the time. um 99% of the time maybe I'll get something and then I wasn't aware that earnings came out or the FBI raids the headquarters of a stock I'm long and it gaps down 50%. And those are just you know you can't control those risk. Yeah. Um but we know when we did something dumb in the market and sometimes you'll do something dumb in the market and you'll get rewarded for it and you have to say was that a good trade or did I get lucky? You know, the money's going to spend the same, but getting lucky versus having a strategy. Completely opposite. Some people say, "I'd rather be lucky than smart." Not me. I I' I'd rather be smart and figure this out and have a strategy where I can protect my gains rather than relying on luck. And, you know, I'll take it when I get it. Of course, company gets bought out. I was long their their stock or some calls. That's great. That's just a bonus. You don't expect that stuff. And over your career, no doubt you've seen so many different moments where, as we've talked about a few times on the podcast, you know, from meme stocks to um you know, the quantum stocks to AI stocks, like this is a constant theme. Is that something that has constantly taken place over your career, you know, have you seen in the markets, whether it was do, whether it was uh wherever it was, like was there always something that's in play that is the the new hype, if you will, that sees that volatility? Yeah. 3D printing. Um, yeah. Uh, I mean, you can go on and on. I can't think of a lot of them right now. It's always a trick of the mind, but yeah, there's they're not always there, but when they do start to pop up and just in December, we had like five groups at once. They were all just going bananas. And it really it didn't just seem easy to make money. It was easy to make money, but was it easy to keep your money? And that's the difference is did you keep your money in those? If you didn't keep your money, then you're probably more of a gambler than someone who trades with discipline and rules. And I always sell those things way too early. Maybe I hold on to, you know, few hundred shares straggler and do really well with them. Um, but I'm always about, you know, reducing risk and when those themes come up and if you can find them, let's say it's bird flu, let's say, again, it's 3D robot 3D printing or it's uh whatever they might be, lasers, um, drones, lasers, the the the themes when they come if you can get on them and then identify who else is in that group. And a great tool for that uh you know stock twitz you look at you type in the symbol like um UAVS well you'll see people you know when that one first started to move in that group some people go and they do all the research or just you know go to AI and said what stocks are related to drones and then look at those charts and put alerts on them and watch them each day you know check in on them a couple day times a day which one's moving which one's maybe next to get going and when they go, man, they're a lot of fun and super profitable in the short term. How important is it to be able to, you know, in terms of a career and a long-lasting career, is it to focus on that? Focus on being able to track the the money flow, if you will, and what's in play. The, you know, I'm not typically a news trader, so I don't look at, hey, this company reported earnings, I want to trade them the next day, or they got an upgrade, that sort of thing. Um, but I consider those types of, you know, thematic moves uh to be a bonus and they can be huge bonuses. I and and they often come, you know, towards the end of the year. Um, and I think it's kind of got a little bit to do with hedge funds. You know, a lot of the big money is there not holding those stocks back and shorting them. They're just kind of letting the the the uh the patients run the asylum. let them run those stocks up. Then they come back from vacation, they're like, "All right, let's start shorting these things and crush them back down." So, when they're there, they're great. Uh the key is to recognize them fairly early. And social media is great for that. And for someone who's interested in using the the VWAP, you and learning more about it, who's maybe not using it at the moment, what would your advice be to them? I know obviously, right? Besides buy my book, right? um actually gains. Yeah. Um so that's on Amazon. Um go to my YouTube uh you know, search my name and anchored VWAP. I've done a number of presentations about it that are, you know, good hour-long video instructionals. I love that. And hopefully people take that. Before we do finish up though, let's uh can I just get my uh phone, Josh? We have questions from the audience. Okay, great. Connected. They're not specific to to yourself, unfortunately. Yeah, it doesn't matter. whatever it is. But, uh, there were some good ones. I've done a couple now and, uh, surprisingly there were some really, really good, uh, different types of questions. So, this one is apparently from the Elliot Wave community. So, I don't know if that's like a huge thing that that's their name that they inputed. Um, but what is your approach to managing emotional discipline when dealing with high-risisk trades? It's not really emotion so much because, you know, for as long as I've done it, I I don't tend to get overly emotional. If I find myself getting emotional, then it means I have too much size. So instead, it's more about recognizing the things in advance that might cause me to become emotional. Those might be, hey, this stock has an ATR percent of, you know, 10%. So I'm not likely to get as emotional about that. But 40%. Well, that volatility is going to drive emotion for anyone. So, I know that I need to be looking at the shortest time frames and most likely, you know, smaller share size. Definitely. And just off the back of that, one question I did have personally is how many different strategies do you have like or do you utilize off the back of using the Anchor VWAP? Is it just the one or do you have like different uh different ones that will be in play depending on market conditions? Yeah, I I mean I have several in and in in the book maximum trading gains with anchored VWAP. Little plug. Um, I outlined six or seven strategies in there, right? So, for IPOs, for earnings, for from highs and lows, uh, multiple, uh, you know, one of my favorites is, uh, and I wrote about this in detail, pull back to a stock is up, you know, on Tuesday, uh, up 4%. It breaks out of a base. Wednesday, you come in and the stock pulls back a little bit initially. Maybe there's a market maker selling short the stock, you know, selling short 50,000 shares because he needs to buy 500 that day. So, he drives it down to the prior day's VWAP and buys a 100,000 shares. So, he covers his short and gets 50,000 long and then it gets back above the daily VWAP. That pull back to the prior day's VWAP where the move initiated from. That tells me there's buyers still left over from the program that was turned on yesterday. This is most likely a multi-day program. So as it starts to rally again first 10 minutes of the day to get long with a stop below the low day that's a strategy selling you know um uh as it approaches a level with you know different you know a two-minut stop or a five minute stop uh the the gap above the fiveday moving average the gap you know chase the gap or wait for VWAP IPOs. So, there's a lot of strategies uh and and by no means do I have a corner on them, but I've given I think there's eight or nine of them in the book that are one you could use and trade and do well with because I do. Um or two, you can you know make the trade your own or adjust it for your strategies or the markets you're trading. How important do you feel it is to have various types of strategies versus just say having just the one? It's real important because the market's not always doing one specific behavior. And that's why uh to kind of go off on a tangent here, a lot of people will, you know, use scanners and screeners to say, "Here's what I want from the market." And there's nothing wrong with that, but you have to have several screeners. You know, in an uptrend, I want to screen for this. In a downtrend, I want to screen for that. In a sideways market, I want to screen for this. and knowing the difference of when to pay attention to which one. Instead of using screeners, what I do is I have a long list of stocks and rather than telling the market what I want, um, I look at multiple stock, you know, hundreds each day on six different time frames and I see what's starting to shape up so I can hopefully get involved prior to all of the semiconductor stocks breaking down. Yeah. as I start to see one of the leaders and two of the leaders break down and I see well the SMH looks vulnerable these ones are likely going to drag it down if they really get hit hard it's going to take these other ones with it so now I have a list of stocks where we go back to that thematic that the stocks lead the sector the sector doesn't lead the stocks the leading stocks in the sector lead the sector so if you're familiar with what's going on under the surface first you're at a a definite advantage Yeah. And I should have asked you this question earlier, but this will be the a good one to finish on then. But in terms of programs, like you not only do you mention them and understand them, but you actually have details on them of like, you know, how they can operate. Where did you learn uh about like the different programs and how they could operate? Uh a lot of it was just, you know, talking to other people, observing, uh certain things. Jay Woods down on the floor of the New York Stock Exchange. I first met him about uh nine years ago and uh it was like it was a forum and you would type in a question. So I typed in a question about VWAP and he thought that was really so we we spoke and he brought me down to the floor. He said, "Brian, what are they what are they interested in? Listen to what all these specialists talk about and they're saying what's what's the VWAP? What's the VWAP?" And they want to set their programs based around VWAP. So it it's talking to people like Jay, talking to portfolio managers, listening to Ken Griffin and listening to what he said, not just, hey, he's in front of Congress, right? Yeah. So just in in in my observations, I've always, you know, kind of suspected, hey, here's what's going on. And then I get little pieces of confirmation of that uh as I, you know, talk to other people and see, you know, writings and papers and that sort of thing about it. It's like research. Yeah. Yeah. Love that. Brian, I I think we could have kept going and going and going, which I would love to do. So hopefully we'll see you in the future. No doubt. We definitely host roundts as well, which I would love to have you part of. But everyone at home, drop a comment with your biggest takeaway from this. I know there was so so much. Hope your notepads are full. Rewatch it. I would say definitely. But links for Brian, including the book and everything, will be in the description. So, make sure you go check those out. Other episodes are on on screen. And until next time, everyone, take care.