Guide to Day Trading Strategies

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aggressively and be a bit cautious on later pullbacks. When stocks are trending, we want to buy 
as close to moving average support as possible to reduce risk. In contrast, if I am looking to 
take a reversal trade, I will usually look to take a position when the price is extremely extended 
and has moved away from the 9 EMA. The plan is to take pro
À
ts on part of the trade when price 
comes back to the 9 EMA to test that support or resistance level.
Chart of a stock respecting the 200 EMA (dark purple trend line).
Importance of the 200 moving average
While I primarily use the 9 EMA on my 5min and 1min charts, the 200 EMA is also a very well 
respected moving average. It is not uncommon to 
À
nd support or resistance at the 200 EMA on 

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the 5min chart, and especially on the daily chart. I often trade cautiously around the 200 moving 
average because I recognize stocks may consolidate before breaking away from that level. If I 
am looking for a reversal trade and the price is running into resistance at the 200 EMA I would 
consider that to be a stronger setup. Most of the momentum trades I take will be well above 
the 200 EMA. I rarely take trades to the long side that are below the 200 EMA or take trades to 
the short side that are above the 200 EMA.
Chart of the VWAP indicator.

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Image of standard VWAP settings.
Volume Weighted Average price (VWAP)
In addition to the standard moving averages, I use the Volume Weighted Average Price (VWAP). 
Just as the exponential moving averages give weight to recent price action, the VWAP weighs 
the amount of volume that traded at each price more heavily. The VWAP gives us a really good 
understanding of the average price of the stock over the course of the day, because it factors in 
how many shares were traded. The VWAP is the equilibrium point of a stock on any given day. If 
we are looking for countertrend setups, we would want to 
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nd a stock that is extremely extended 

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