Good morning, traders…
You’re at a fork in the road.
Your account is either growing steadily or bleeding slowly.
The difference comes down to two things:
- The math behind your trades
- The discipline to execute your plan.
I scale out of my trades quickly. That’s my style. It works for me.
Others in our community have very different risk tolerances. They hold positions longer. They’ve found what works for them.
You must know yourself and trade according to who you are.
But regardless of your style, the foundation stays the same.
You need a pattern that works.
You need the math to add up.
And you need the discipline to execute when the setup arrives.
That’s why I’ve been focusing on one specific setup in my Options Income Trader service.
This pattern can completely transform your trading for one reason…
You Can Lose More Than You Win (And Still Make Gains)…
The Pattern
The pattern I’ve been focusing on?
VWAP Pullbacks.
They work like this:
Step 1: Find a Stock Trending Up
You want to see a stock showing strength early in the day. Higher highs. Higher lows. The stock is showing momentum and making moves.
Step 2: Wait for a Pullback to VWAP
After the stock pops, it often pulls back toward the VWAP line. This is a cooling-off period where early buyers take profits and the stock consolidates.
Step 3: Look for a Hold (and Bounce) at VWAP
This is your potential entry point. You want to see buyers stepping in, a green candle or reversal pattern forming, and volume picking up again. This confirms the pullback is holding and momentum is returning.
Step 4: Enter Small, Define Your Risk
Buy a small position near VWAP. Set a tight stop just below it. Give it a little room, but not much. If VWAP doesn’t hold, you’re out fast.
Step 5: Set Your Price Target
Target the recent high of the day or a nearby resistance level.
The Math
3:1 risk-to-reward.
Risk $100 to make $300. Win 1 trade, lose 2 trades, still profitable.
Win 1: +$300
Lose 2: -$200
Net: +$100
Win 33% of your trades and still make gains.
High-probability setups win more than 50% of the time.*
#TrustTheMath.
Why It Works
The strength of this pattern lies in the risk profile.
The VWAP pullback is a high-probability setup because you’re waiting for the stock to come back to support.
Entering at a key support level (with a defined stop-loss) places the trade in one of the best risk/reward spots in the market.
You won’t get stuck holding a false breakout. And you’ll never be chasing an overextended move.
The 3 Commitments
1. Patience to wait for the best level.
2. Strong risk/reward on every trade.
3. Discipline to follow the plan.
Your risk tolerance determines your exit strategy.
Some of my colleagues like to hold trades for weeks.
I scale out quickly.
Neither is wrong.
The only “wrong move” is trading someone else’s style and trying to pass it off as your own.
The Sign That Sits On My Desk
I keep a desk sign in front of my monitor that says:
- Plan your trade.
- Trade your plan.
- Define your risk.
- Prepare for the worst-case scenario.
The pattern works. The math works.
All you’ve gotta do is execute with patience and discipline.
How do you think I bagged these massive peak gains last month?
- +159% in 2 days on MRK*
- +49% in 1 day on GOOGL*
- +64% in 2 days on EOSE*
- +244% in 1 day on PYPL*
We’re about to cover all of this (and more) in my 2-Day Simpler Options Bootcamp…
Happy trading,
Ben Sturgill
*Past performance does not indicate future results. Not typical
