If you follow my live streams, you've heard me say the phrase "If a stock doesn't want to die, then it's a buy."
What this means is that if a stock wants to move sideways and not roll over and sell off, then there is a good chance that it's going to rip higher.
Buyers are in control and they are keeping a stock above certain levels.
That happened this morning for us with CDLX as you can see in the image below...
We got in at 5.95 and 5.75, we locked in profits at 6.06, and then we were stopped out of everything a 5.92.
I put 5.92 as my last out because it was the breakout of the previous candle, and it ensured that with these two trades, I would lock in a winner for the day.
This is what's known as "dollar-cost averaging" and it's a good way to find out if you're trade is a winner.
Our two entries on CDLX were 5.95 and 5.75. To find out what "break even" is for your trade, you add the two together and divide that sum by 2.
In this case 5.95 + 5.75 is 11.7. Divide that by 2 and we get 5.85 as break even.
Setting our stop to 5.92 ensured that this trade would work out in our favor once it broke 6.00.
Yes, CDLX dipped a little to start the day, but it never broke the defined risk I had on it using the pre-market lows and the multi-day VWAP as my outs.
So when I saw it hold 5.75, my thoughts were immediately to get in.
Confused? Don't believe me?
Let me show you exactly how I did it...
Click here or the video below to see my timing for getting into CDLX live...
And big news this week!
Earnings season is right around the corner.
And if you weren't aware, earnings is the absolute best time for us to make some VWAP trades.
Volume piles back into the markets.
And we'll be there to snatch up any potential earnings reversals.
But the only way that you'll be able to trade alongside me is if you join the Warlock's World before earnings hit this Friday.
I've hooked up with Money Morning LIVE's Director of Client Relations Gabe Oropollo to roll back the price of a lifetime Warlock's World membership to 2020 prices.
Everything else is going up in price, well I'm taking things down - because that's how important it is to get in with me right now.
Give Gabe a call at 877-568-0407 if you want to make money.
Give Gabe a call at 877-568-0407 if you're ready to change your trading life in ways you never thought possible.
Give Gabe a call at 877-568-0407 and join Warlock's World before Friday - then we can laugh and frolic and profit together for LIFE.
The post Dollar-cost Average Your Losing Trade into a Winner appeared first on This Is VWAP.
About the Author