I received an email from one of my readers that went as followed...
Hey Kenny, I want to trade VWAP breaks, but my account isn't big enough to buy 1000 shares of a stock like you suggest. But I still want to trade like you do. Is there a way for me to do this?
For anyone with a small account, you need to first determine the risk you need to put on each trade.
Let's say you have a $5000 account.
You can't be risking $500 per trade. That kind of loss isn't going to keep you sustainable. It's all about position sizing and you can't have one trade risking $500, while the next only risks $50.
Keep it consistent.
The 2% rule is a good one to follow, as it allows you to keep your risk-reward intact, while at the same time allowing you to put on multiple trades throughout the day.
With that rule, you would want to be risking a maximum of $100 per trade on a $5000 account.
If you took a look at my watchlist this morning, you would have seen that there were plenty of stocks below $10 that you could have bought 100 shares of to try and make some money today on VWAP breaks.
LCID, PLTR, FSR, NVAX...
FSR for instance had a VWAP break at $5.71. Your risk was the low of the day at $5.56.
That's at $0.15 risk which is a $15.00 total risk on that trade.
Buying it at the VWAP break would have gotten you all the way up to $6.55.
Now, of course, it would have been extremely difficult to find the top of the day...
But selling into the move up was a total move of $0.75.
On 100 shares, that's $100 in your pocket...
This might not seem like a lot. But if you do that every day the market is open, that's an extra $19,125 in your pocket by the end of the year.
That's turning a $5,000 account into almost $25,000.
It's the little trades like this that add up. And if you want to build your account, you need to start small.
But Kenny, there were also names like SWKS and PYPL today on your watchlist. How do I trade those?
I hear you ask...
I'm always a stock-first kind of guy.
It's just easier to make money on stocks than with options.
But if you wanted to get into options trading and leverage your gains, there's only one way to do it...
Click here or the video below to see what I'm talking about...
Anyone reading this can play VWAP breaks to the up or downside for profit.
The more you do it, the easier it becomes. And the better you get at identifying your risk, your entry, and your exit.
I don't want you to be left in the dust while we're having all the fun over at the Warlock's World (as seen with our PLTR call options today).
So, join me today, and let's get you started on profiting off of VWAP breaks.
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