Original subtitles

PDD, one that I have on my chart just from

recent trading history. This happened on

the most recent trading day. It was a

stock that was in play. We had much higher

than average volume. Notice I'm using the

two-minute chart here. I recommend this

particular strategy be used on the two

-minute chart. You're going to have a

higher hit rate. The one-minute tends to

have too much noise, and the five-minute

tends to be just a bit too slow. When we

look at the five-minute here, yes, it does

still work in two of these scenarios, but

looking at a very large sample size, I've

found that the two-minute works the best.

That is my suggestion. That's what I

personally use. Now, looking at the actual

price action here, look how price off the

open extends away from VWAP, pulls back

into VWAP. You have a perfect test of VWAP

there, pushes into the session high, makes

a new session high, again, pulls back into

VWAP. Now, this signal is actually not as

strong. Give you a second to try and guess

why. Reason being is that our proximity to

our target is very, very close. If I enter

when this two-minute bar closes right

here, where's my target? Well, again,

remember the target is session highs. So

the close here was 101.25. I'm going for

101.5, 25 cents of potential profit, and

my risk is down here at 60 cents. So is

that a very good proposition? No, not

really. Not really. Now, again, this trade

still did work, but it is a unfavorable

risk-to-reward setup. You want to be

focused on these trades down here, unless,

of course, you manage to get an entry much

closer to VWAP, but that would require you

to kind of be front-running the candle

closure, which, again, do so at your own

risk. I don't suggest it. We need that

signal bar to close completely before we

establish our entry here. Now, later in

the morning, you do have a very clean

pullback to VWAP. Holds perfectly, right?

Holds perfectly almost to the cent. So the

way you would trade this is once this

candle closes, you're long in your calls.

Your stop is right down here. So your

entry is, we'll call it 102.2, right

through here. Stop is, we'll just call it

102, just to round, to make it easier. So

you're risking 20 cents. Remember, our

target is session highs. So we're looking

for a 1.4 gain, $1.40 gain, and we're

risking 20 cents. That's better than a 5

to 1. So this is an amazing risk to reward

opportunity, and it worked out perfectly.

It was a little slower, but it worked out

perfectly. This is the beauty of the

pullback to VWAP trade. Extremely tight

risk point, defined targets with a very

high hit rate. What's not to love, right?

Let's look at some other examples here. We

have this trade working frequently in the

index, such as SPY. Now, what you'll

usually see

is action like this. Let's break this down

quickly. So I don't suggest trading this

right off the open in SPY. You're usually

going to get that consolidation. It

breaks. Remember, the break of VWAP is not

the trade. We're not trading the break of

VWAP. So this initial break of VWAP is the

extension move away from VWAP. Here's the

retest. Here's the bounce into retest.

We'd be looking at puts here, but the

challenge here is that this move was made

on the one-minute chart. Look at this.

Look at this. So this move was actually

put in on the one-minute chart. Yeah, it

was a great momentum move. It worked

perfectly, but it would require you to be

on the one-minute chart. A lower

probability setup simply because on the

one-minute, you're going to be getting a

lot more noise. But this trade did work.

Now, let's say you miss that play. What

you can do here is you can treat this

consolidation right through here around

VWAP as the pullback to VWAP. And the

reason is, is because you're still working

with this initial extension lower. So

remember, price will zig and zag toward

its target. It's important to determine

kind of what what wave price is currently

in. Here's that initial move lower. It

bounces. Okay. Once we start to see this

break below VWAP again, I wouldn't be

entering through here, but look when it

comes in retests. Right through here, it

comes in retests. You have that shooting

star candle. Okay. We're in puts or we're

short ES. Our stop is right through here,

right up through VWAP, 452.4. And again,

we're going for those session lows. Look

how nicely that worked out. So again,

there's a lot of nuance involved here. You

want to be focused on the details. The

details absolutely matter and focus

primarily again on the pullback entry.

We're not, we're not shorting the break of

VWAP. We're not long the break of VWAP.

That's a totally different trade. It's not

the trade that is being taught in this

course. Okay. So that's an example on spy.

Let's look at QQQ. Very similar. Again,

not looking to trade the break below VWAP

here. We're just looking to get involved

on this pullback into VWAP, right?

Remember there's a lot of gray area within

trading. Nothing is perfectly textbook as

we want it to be. So you'll have these

scenarios where price kind of oscillates

near VWAP. This is especially common in

the index. It's nothing to really be

alarmed at. You just remember VWAP is a

location. We're just looking at price at

VWAP. Then we need some sort of signal

bar. It's not until we have a signal bar

that we actually initiate the trade. If we

get into ES, if you're trading a prop firm

challenge account, you can look at ES

here. Very similar. So these scenarios

where price breaks below VWAP, you have a

bounce into VWAP. I like to see that you

can start to attempt shorts here, but

again, look at how close we are to session

low. So your target is very limited. It's

very, very limited. Now here is kind of

just noise. I call this noise as price

consolidates here near VWAP. Again, it's

just a location we're interested in. The

reason you get these consolidations here

is because there are so many eyes on VWAP.

And so some indecision here, we don't

really have a trade here with the

exception of this move lower, which again

happened on the one minute chart. Here's a

scenario where you may try a long, right?

Price breaks above VWAP. It pulls back.

You try a long, you have a nice signal bar

here. You try a long, it doesn't work. It

doesn't work. And that's okay. Again, the

strategy does not have a 100% hit rate.

You'll just be taking your stop right down

here once it fails to hold. And maybe you

see this next signal bar that it's a short

and you start to get short and you can

recuperate your loss. If not, don't worry

about it. Taking a stop, taking a stop is

no big deal. It's a natural part of the

trading game. Okay. Don't be distraught by

taking stops. It's not a reflection of who

you are as a trader or who you are as a

person. It is just a normal part of the

game. I reiterate this because very

ambitious folks do not like being wrong.

People with maybe big ego do not like

being wrong, but you need to get good at

taking your stops. You need to get good at

being wrong if you want to be a successful

trader. So these are some real life

examples of the pullback to VWAP trade in

ESNNQ. If we look at something like a

trend day, you're going to have phenomenal

opportunities here. Not really a totally

clean pullback to VWAP. I'm glad we're

looking at this one because this is an

important example. When you're trading a

shallow pullback that doesn't quite hit

VWAP, you have to understand that your

risk is still down at VWAP. We're trading

VWAP here. So if you treat this as a

pullback to VWAP, you start to buy your

calls or you start to buy ES contracts

right around here and it fails. Well, you

don't know you're wrong until VWAP breaks.

So yes, this is a trade that could work,

but you open yourself up to a ton of risk

because we have to, if price continues to

move lower, we have to wait for that

retest of VWAP. So this is not a trade

that I love treating it as the pullback to

VWAP trade. It's going to open you up to

too much risk, right? It may work here and

there, but I would not treat that as a

pullback to VWAP trade. That's something

totally different than what we're talking

about today. This is a trade that works.

It's just not what we're talking about

today. Let's look at some more examples

here. I remember the Chinese stocks were

in play this most recent trading day.

Yeah. We have an extension move again here

on Baba. This extension move, right? It

moves away from VWAP, pulls back into

VWAP. So look at this consolidation,

right? Maybe you enter here on this signal

bar and you would have gotten shaken out

right through here. Are you going to

reenter? You can, you absolutely can. This

again is a very normal scenario of VWAP.

There will be scenarios where you get

shaken out and then price actually puts in

the move. There's a real aspect of

trading. Again, there is a lot of gray

area within trading. And so you want to be

kind of aware of how you're going to treat

these scenarios. Now me personally, I'm

going to be looking for a re-entry if I

get shaken out and then another setup

develops. And when I say shaken out, I

just mean that price runs my stop.

Remember because the stop is through the

lows here. Price runs my stop and then

develops another signal. I'm going to take

that next signal because the assumption

is, is that I got shaken out. The trade is

actually still working. Maybe I was a

little early on the first entry. I try it

again. Now with these types of plays, you

don't really want to be trying them three,

four times, right? Maybe try it a second

time. Maybe not, but don't be pushing,

pushing it, trying it a third time, fourth

time, fifth time. Like you're just going

to be chewing through your capital. It's

not really something that you want to be

doing. Uh, it's not going to be long-term

beneficial to your growth as a trader,

right? So this is the, the pullback to

VWAP setup. Hopefully it is making sense

for you. If you have questions, feel free

to just send me an email. You can reach

out to us on the contact page on the

Opinicus Holdings website. If you're in

the think tank, you can send me a DM there

with any questions about this material at

all. I want to make sure that you have the

support that you need. Now we are not done

yet. There is another important component

of actually finding success in the market

and finding success with this strategy.

You understand risk management. You

understand the fundamentals of the

strategy, what it looks like both in

theory with the slide that we went over.

And then in real time, you know, what

stocks you need to focus on. It's going to

be stocks in play or the index SPY QQQ ES

or NQ. If you're trading futures again,

you