You cannot anchor randomly. You need a high-impact event.
Pro Tip: On the daily chart, look for the highest volume day of the last month. Anchor your VWAP to the open of that day. maximum trading gains with anchored vwap pdf download
Scenario: Price breaks below your Anchored VWAP on heavy volume. Action: Do not buy the dip. The anchor has now flipped from support to resistance. The Trade: Wait for a retest of the Anchored VWAP from below. Short the stock with a tight stop above the anchored line. The expected move is a swift retracement to the previous low. Gain Potential: Because you are trading against trapped buyers, the velocity of the move is often explosive—yielding 4:1 risk-reward in a matter of hours. You cannot anchor randomly
Scenario: A company crushes earnings, gapping up 10% pre-market. FOMO is high, but chasing leads to painful reversals. Action: Anchor your VWAP to the opening candle of the earnings gap day. The Trade: Wait for the price to pull back to the Anchored VWAP. If the stock is truly strong, institutional buyers will defend this level. Enter on a bullish rejection wick. Your stop loss is 1x ATR below VWAP. Gain Potential: 3:1 to 5:1 risk-reward ratio as price reverts to trending above the anchored line. Pro Tip: On the daily chart, look for
Even with a perfect tool, traders fail. Avoid these three errors: