We Will Begin Shortly…

High Probability Trade Ideas Using

the VWAP and NYSE TICK

Craig Hill
Ninjacators
ALL INFORMATION IN THIS WEBINAR IS PROVIDED FOR EDUCATIONAL PURPOSES ONLY AND IS NOT AN
OFFER OR A RECOMMENDATION TO TRADE FUTURES, STOCKS, OPTIONS OR FOREX.

THIS MEETING IS BEING RECORDED. BY CONTINUING TO BE IN THE MEETING YOU ARE CONSENTING TO BE
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UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING.
ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-
COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY.
SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED
WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS
LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

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ALSO A HUGE RISK OF LOSS. A LOSS INCURRED IN CONNECTION WITH TRADING FUTURES CONTRACTS,
STOCKS, OPTIONS OR FOREX CAN BE SIGNIFICANT. YOU SHOULD THEREFORE CAREFULLY CONSIDER
WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION SINCE ALL
SPECULATIVE TRADING IS INHERENTLY RISKY AND SHOULD ONLY BE UNDERTAKEN BY INDIVIDUALS WITH
ADEQUATE RISK CAPITAL. AN INVESTOR COULD POTENTIALLY LOSE ALL OR MORE THAN THE INITIAL
INVESTMENT.
 My Goal Today

To show you how to use the Volume Weighted

Average Price (VWAP) and its Standard
Deviation Lines in conjunction with the NYSE
TICK to help you find High Probability / Low Risk
trading opportunities Day Trading the E-Mini
Futures contracts.
 What Is The VWAP?

The Volume Weighted Average Price (VWAP) is

a trading benchmark used by institutional (and
retail) traders that gives the average price a
market has traded at throughout the day, based
on both volume and price.
The Volume Weighted Average Price (VWAP)
provides traders with insight into both the trend
and value of a market.

The Volume Weighted Average Price

(VWAP) provides traders with insight into
both the trend and value of a market.
 Institutional Traders Use The VWAP...

Large institutional traders use the VWAP ratio to

help move into and out of stocks with as small of
a market impact as possible. Institutions will try to
buy below the VWAP or sell above it. This way
their actions push the price back toward the
average.
 How Do We Use The VWAP To Our
Advantage?

We use the VWAP to determine and identify

intraday support and resistance levels… where
institutional traders are doing their trading.
The VWAP and its Standard Deviation lines act like a
magnet for price.

[chart]

You can often see price reverting back to the

VWAP after extremes are tested at the VWAP
Standard Deviation lines.
 With that said…

Look for trades ONLY at/near the VWAP and/or

the upper and lower 1.0 (for trending markets)
and 1.5 (for two-sided markets) Standard
Deviation lines.
 In a two-sided market, focus on
looking for trade ideas at/near the During the trading day, 65% to 75%
VWAP and/or its -1.5 / +1.5 of the time, the E-Minis will trade from
Standard Deviation lines. one extreme to the other.
 During the trading day, 65% to 75% of the time, the
E-Minis will trade from one extreme to the other.

In a two-sided market, focus on looking

for trade ideas at/near the VWAP and/or
its -1.5 / +1.5 Standard Deviation lines.
 During the trading day,
25% to 35% of the time,
the E-Minis will trend.

In an UPTREND, focus on looking for

trade ideas at/near the VWAP and/or its
+1.0 Standard Deviation line.
 In a DOWNTREND, focus on looking for
trade ideas at/near the VWAP and/or its -1.0
Standard Deviation line.

During the trading day, 25% to 35%

of the time, the E-Minis will trend.
How Do We Use The VWAP and NYSE
TICK To Identify High Probability Low
Risk Trade Ideas?
 What Is The NYSE TICK ($TICK)?

The NYSE TICK is a market internal that

measures how many stocks, on the NYSE (New
York Stock Exchange), are currently trading on
an uptick minus how many stocks are currently
trading on a downtick.
 We can use the NYSE TICK to look
“under the hood” of a stock index to gauge, in
real-time, what the individual stocks that make up
the index are doing to determine the true health
of a move in price and/or who’s in control
(Bulls or Bears).
The NYSE TICK shows us the overall sentiment
(Buying Pressure and Selling Pressure) in the
stock market and Momentum Shifts.
When the NYSE TICK is mostly trading…

ABOVE its zero-line, there is more Buying Pressure.

Momentum Shift
 In an UPTREND…

the NYSE TICK will typically sustain lower

extremes at -600 and upper extremes at or
above +800. In a STRONG UPTREND, it
generally holds above -400.
When the NYSE TICK is mostly trading…

BELOW its zero-line, there is more Selling Pressure.

Momentum Shift
 In a DOWNTREND…

the NYSE TICK will typically sustain upper

extremes at +600 and lower extremes at or
below -800. In a STRONG DOWNTREND, it
generally holds below +400.
The NYSE TICK is also helpful in telling us when
the stock market is indicating short-term
exhaustion.
In two-sided markets,
look for Positive or
Negative Divergence
between the NYSE
TICK and PRICE.
 After a sustained directional move to the UPSIDE,
Negative Divergence between the NYSE TICK and
PRICE is typically associated with Short-Term Exhaustion
and/or a Momentum Shift back to the DOWNSIDE.
 After a sustained directional move to the DOWNSIDE,
Positive Divergence between the NYSE TICK and PRICE
is typically associated with Short-Term Exhaustion and/or
a Momentum Shift back to the UPSIDE.
So… How Do We Time Our Trades?

Where Do We Enter?
When Do We Exit?
 First…

We need to determine if the market is

likely to Trade Sideways or Trend!

How Do We Do That?
By understanding the Bigger Picture
Context…
 30 Minute Chart
- 75 EMA
- 300 EMA
- Weekly VWAP w/ +1/-1 Standard Deviation Lines
- RSI(2) w/ 85 Overbought and 15 Oversold
 If the market is likely to trade
Sideways… then we’ll look to Fade
Extremes!
If the market is likely to Trend… then
we’ll look to Jump on the Trend!
Trade Setups for Fading Extremes
LONG Setup Entry (Two-Sided Markets)...
Look for a BUYING opportunities AT / NEAR / BELOW the
VWAP -1.5 or -1.0 Standard Deviation Line.

BUY the market…

- when price CLOSES back above the 13 EMA following
Positive Divergence between PRICE and the NYSE TICK or
a Momentum Shift (back to the UPSIDE).
After entering LONG, place SELL
STOP a few ticks BELOW the
most recent significant Swing Low.
After entering LONG, set PROFIT
OBJECTIVES a few ticks just BELOW the
50%, 100%, and 150% (or 200%) Fibonacci
Extensions of the Initial Swing UP from the
most recent significant Swing Low.
SHORT Setup Entry (Two-Sided Markets)...
Look for a SELLING opportunities AT / NEAR / ABOVE the
VWAP +1.5 or +1.0 Standard Deviation Line.

SELL the market…

- when price CLOSES back below the 13 EMA following
Negative Divergence between PRICE and the NYSE TICK or
a Momentum Shift (back to the DOWNSIDE).
After entering SHORT, place SELL
STOP a few ticks ABOVE the most
recent significant Swing High.
After entering SHORT, set PROFIT
OBJECTIVES a few ticks just ABOVE the
50%, 100%, and 150% (or 200%) Fibonacci
Extensions of the Initial Swing DOWN from
the most recent significant Swing High.
Trade Setups for Jumping on the Trend
LONG Setup Entry (Trending Markets)...
Look for a BUYING opportunities AT / NEAR / BELOW the
VWAP or the +1.0 Standard Deviation Line.

BUY the market…

- when price CLOSES back above the 13 EMA following
Positive Divergence between PRICE and the NYSE TICK or
a Momentum Shift (back to the UPSIDE).
After entering LONG, place SELL
STOP a few ticks BELOW the
most recent significant Swing Low.
After entering LONG, set PROFIT
OBJECTIVES a few ticks just BELOW the
50%, 100%, and 150% (or 200%) Fibonacci
Extensions of the Initial Swing UP from the
most recent significant Swing Low.
SHORT Setup Entry (Trending Markets)...
Look for a SELLING opportunities AT / NEAR / ABOVE the
VWAP or the -1.0 Standard Deviation Line.

SELL the market…

- when price closes back below the 13 EMA following
Negative Divergence between PRICE and the NYSE TICK or
a Momentum Shift (back to the DOWNSIDE).
After entering SHORT, place SELL
STOP a few ticks ABOVE the most
recent significant Swing High.
After entering SHORT, set PROFIT
OBJECTIVES a few ticks just ABOVE the
50%, 100%, and 150% (or 200%) Fibonacci
Extensions of the Initial Swing DOWN from
the most recent significant Swing High.
 LUNCH BREAK

We Will Resume at 12:30PM ET …