Hello, everyone, and welcome to Schwab Coaching. My name is Cameron May. I' m a senior manager here at Schwab, and this is Advanced Charting Techniques. And I wonder if you' ve ever had a question when maybe a trade signal shows up on a chart, or any trader might have this question. Hey, I got my signal on my daily chart, but should I just, should I buy right away? Should I wait for later in the session? Should I buy in the morning or the afternoon? When might a trader time the entry down to an hour or even to a minute when they' re generating chart signals on a longer-term timeframe? That' s a great discussion. So today we re gonna be using an indicator that' s used by some to try to address exactly that scenario.
It' s called VWAP, Volume Weighted Average Price. We' re gonna be talking about how it' s built and how it might be used for the shorter -term timing of maybe swing trade or trend trade entries. So very much forward -looking to this discussion, as I always do. I look forward to all these Friday discussions. But before we can get into the particulars, of the discussion, first of all, I wanna say hello to everybody out there on YouTube. Hello there, BJ, SpeakTruth, Beth, Snow Architect, Ocean Life, Will, David, everybody else. Thanks for joining us week after week. We really do appreciate your attendance and your contributions to these discussions. If you' re here for the very first time, wanna welcome you as well.
And if you' re watching on the YouTube archive after the fact, enjoy the presentation, but be aware that you' re invited to join us in the live discussion. It does kick off promptly on Fridays at one o' clock Eastern time. We' d love to have you on the show. We' d love to have you here. And I also wanna give you the heads up that Barb Armstrong' s gonna be hanging out in the chats with the live audience. Barb. So, I' m gonna be addressing any questions that I can' t get to during the natural flow of the presentation, as long as they' re on topic. Barb' s there to pick up that slack. So thanks for being there, Barb. And Barb and I would like to also issue an invitation to you to follow us on X.
If you' re not doing that already, it doesn' t cost anything, but it gives you one more way to connect with your favorite presenters. You can find Barb there at BarbArmstrongCS. You can find her on Instagram at BarbArmstrongCS. And me on X at CameronMayCS. All right, but let' s get into this. Let' s get into talking about the volume-weighted average price, also known as a VWAP. We actually talked about the anchored VWAP just a couple of months ago. This one' s the same -ish, but very different, okay? So let' s get right to, first of all, the risks associated with trading. You need to bear these in mind. Risk is real, so this is important information. The information here is for general informational purposes, only.
It should not be considered an individualized recommendation or endorsement of any particular security, chart pattern, or investment strategy. VWAP does not recommend the use of technical analysis as a sole means of investment research. And investing involves risks, including the loss of principle, all right? So let' s go right to thinkorswim, and I wanna set the stage. Let' s put ourselves in the shoes of our hypothetical trader out there. Maybe they' re looking at a daily chart, planning for a short-term, maybe a swing trade, maybe looking for a trend, and trade entry for something a little bit longer term. But in any case, maybe they observe, we' ll use ExxonMobil as our first example chart here.
And a trader might be looking at the ebbs and flows of price activity on ExxonMobil, noting that it tends to run up and pull back, and run up and pull back, moving between areas of support and resistance. And most recently, it appears to have gotten toward the low end of that pattern, down near an apparent price floor. And maybe the trader sees that it, boy, this looks like it' s bouncing. For those that use a hold entry, a close above the high of the low day, we might see that we' re down at horizontal support, we' re down at an apparent diagonal support. We had a low day with a red candle here, and it looks like we' re pointing toward closing above that low candle day.
So maybe the momentum is coming back into that stock. So it Some possible maybe our trader is looking for, an entry, but when they spot these sorts of signals, sometimes the trader, it' s only natural to ask themselves, well, do I just take the signal right now? Or is it better at times to enter earlier in the day, or later in the day? Does this stock behave in a way differently throughout the day than other stocks? I' m just trying to optimize the entry here. Even if it maybe adds a little bit, a dollar or two, on an entry and even on the exit, we' re gonna be looking at the other end of the trade as well, okay? So that' s sort of the question that we' re attempting to address today.
And there is an indicator that' s designed to be used on an intraday basis. It doesn' t really apply on anything longer than intraday, but it is commonly used for identifying potential entries and exits in an effort to optimize those, within maybe a minute by minute or hour by hour context. So let' s, first of all, change up our timeframe. We' ve now sort of seen the setup for the discussion. Let' s change our timeframe to an intraday chart. So we' re taking a closer look at what' s going on with this chart. Now, not everybody is familiar with this. When we switch things over from a daily chart to a minute by minute chart, the chart itself looks different, okay? First of all, I' m gonna get rid of these lines.
Let me just pop back here, because I think they' re just gonna be a distraction. Now, we know what these lines are for. Let' s just go ahead and clear that off the drawing set, so that when we switch this back to that minute by minute chart, it' s just not on there anymore. We don' t have to worry about that. The other chart looks different. You' ll notice that we have some white area and some gray area. Well, we' re used to seeing on the daily charts, on the weekly charts, that white area, but what is this gray area? Well, when we go to an intraday chart, the white represents just the normal trading chart, that' s trading hours. That' s 9 .
30 Eastern time to four o' clock Eastern time and in a trading session most days, right? There can be exceptions to that. This gray area is the aftermarket and the pre-market trading. So that' s what this is. It' s actually charting that. The candles are gonna look a little bit weird. It' s a much more thinly traded market time. So yeah, candles are gonna look different. So just be aware of that. We' re using this intraday chart. I had to explain. That' s gonna look a little bit goofy to some. That' s what' s happening. So now let' s add our indicator here. So I' m gonna go up to our Edit Studies. And as I mentioned, this indicator is known as the volume- weighted average price, abbreviated to the acronym VWAP.
So I' m just gonna type that in here. VWAP, a few months ago or a couple of months ago, we talked about the anchored VWAP, which can be used on a daily chart, but today we' re gonna be using just the VWAP, which is really exclusively intended for, you know, intraday sort of trading. So, or intraday timing concerns. So let' s add that to our chart. And as we go to click apply, there are a couple of notes I wanna make here. You' re gonna see a couple of numbers here that are gonna be important through the rest of our discussion. Minus two and plus two. I' ll explain those, okay? Let' s click apply, click okay. And what we' re left with here are three lines.
So we have a purple line, we have a pink line, and we have an orange line. This purple line is the standard VWAP line, okay? The other two lines, the pink line and the orange line are exclusive to thinkorswim. You' re not gonna see these associated with VWAP anywhere else, okay? So I' ll explain those. But what is the VWAP? Well, this purple line is intended as sort of an average. It' s an attempt to identify, to identify what is VWAP. And you can see that within a single day, an average price as, and that average is gonna change throughout the day, minute by minute, okay? So you might think, okay, so it' s just, it' s a simple moving average. No, it' s not a simple moving average.
It' s not an exponential moving average. Its calculation is a little bit different. Now, OceanLife says, can stop limits be triggered during after hours? Not unless otherwise designated that way, OceanLife. They would normally just trigger during normal market hours. Let' s see, Craig says, can we use ThinkScript to identify a price or an average crossing a line of resistance we draw on the chart? I' m not gonna go there, Craig, this isn' t really a ThinkScript discussion, my apologies. You may wanna bring that up in a ThinkScript webcast, but let' s talk about this purple line and why it' s significantly different than a traditional, let' s say a simple moving average. So here' s the concept, okay?
Let' s suppose that you' ve been watching a stock and you notice, let' s say that you' ve watched the last five ticks in price driven by trades, okay? And you notice that there were 10 shares that traded at 40 bucks. And you notice that there were 10 shares that traded at $41. Now, obviously I You' re using round numbers for convenience purposes here, but you notice also there are 10 shares at $42, 10 shares traded at $43. And then finally, you notice that there were 1,000 shares that traded at $50, right? Just eyeball these numbers for me. And if I were to say, hey, tell me for this imaginary period of time, what was the average price?
Well, you might say, well, yeah, there were 40 shares that traded in the low $40 range, but really the bulk of the trading activity was closer to 50 bucks, right? That just seems intuitive, but with a traditional moving average, like a simple moving average, it actually would say, well, average price is gonna be down in this range. So here Is the difference here, a simple average, but just be calculated this way. You take 40 plus 41 plus 42 plus 43 plus 50, and you just add those up and divide them by five. And that would give you what number? Around 43 . 20, yeah. So just looking at a simple average, well, the average price would say that around here is average, average for this data set.
And already for some traders, their intuition is saying, no, it' s not. It should be much closer to this. Well, a VWAP average, and this is kind of a simplification of this, but what this does is it builds the volume into the calculation of the average. So in other words, it So, I' m gonna give less weight to these trades that were lower volume trades, and greater weight to this trade that was higher volume. So here' s a simplified version of how that might be accomplished. Then I' m gonna show you a little bit more detailed version that shows you exactly how the VWAP is actually calculated. But a VWAP average might be thought of as doing something like this. We take 40 times 10. So, you take the price times the volume, and that gives you a value of 400 in that case. Then we get 410 for the next one, 420, 420, 420, and then finally, 50 times 1,000 would give us a value of 50,000. Okay?
And then we re gonna divide that not by just five, but by the volume, 10 plus 10 plus 10 plus 10 plus 1,000 would be 1,400. Let me just make sure I got all of my numbers correct. I think I did. Do you see any errors in my math? I think we' re good here. So let' s break out our calculator. 400, I can' t quite do this one in my head. 400 plus 410 plus 420 plus 430 plus 50,000. Okay. It' s gonna be 5,166 divided by 1,040. Gives us a price, an average in this case of 4,967. Now, you tell me, given this set of trades, which one appears to be more of a, maybe a fair, you know, obviously that' s kind of a squishy term, but a fair representation of the actual average trading price.
4,320. 4,630. Or 4,967. Well, if one, if one is assigning a greater weight of the, of importance to this, to this bigger trade than it might be this one. Okay. So that' s the concept of VWAP because here' s what a trader might be trying to do on a daily basis. They might be using this average and then asking themselves an additional question: are they attempting to refine their entry from the signal they saw on the daily chart? Well, if I go look at the minute by minute, number of trades chart, and I look back over the entire trading day, might that trader be looking to buy at a below- average price or an above- average price? Probably looking to buy at a below- average price.
And as a matter of fact, there' s a certain set of traders, very significant traders in the marketplace that actually use, not everyone of them do, and I probably ought to rephrase that, a certain set of investors, basically, who use this indicator, the VWAP, for the timing of their intraday entries and exits. And that is great big institutional investors and traders, like the big mutual funds, pension funds, those kinds of great big managers of money will sometimes use this indicator to gauge when to get into positions and out of positions. Now, why do they care so much about what's happening? Why do they care so much about what's happening? What' s happening on an intraday basis?
Well, when a huge manager of money is, let' s say, they're trying to buy a new position for the portfolio they manage, well, they're probably going to be taking a sizable position. And if they Re buying a bunch of shares, that can actually tend to move the price of the stock significantly, and that might move it higher and make it, you know, that could be to the disadvantage of retail traders like us, or even for the stock market, you know, for that big manager of money, if they put in a giant order, and it drives prices up, and their order gets filled in chunks, and they' re paying consecutively higher prices above average for the day, and that can really exacerbate, you know, if the stock is already running up, it can drive prices even higher.
It can be like tossing fuel on the flame. And to the same extent, if prices are already falling, it can cause stronger and stronger selling. So, for some institutional traders and investors, what they' ll look for is for price to fall below average, and then start to buy. And that might just drive price up more towards sort of the mean or the average for the day, and they' re having less of an impact on the net price for the day. Similarly, if price is above average, those institutional traders may start to put in those selling orders, which can cause a lot of trouble for them. So, if price is below average, they can tend to drive the price down toward the average.
Now, once again, I have to say, this is not every institutional, not every fund manager out there, does things exactly this way, but it is fairly commonly done. All right. So, in a similar respect, an individual investor or a trader might be looking to use this average to time their own entries or exits, okay? But before we get into specific entry and exit signals, I did want to talk about the exact construction of this line, and then we' ll talk about the other two lines, and of course, how they might be used. So, this is going to be a little bit heavier lifting. This was all in concept. This was sort of the theory of the need, the quote-unquote need for this indicator. How' s it built?
It' s really a five-step process. Number one, we calculate the average price. Number two, we calculate the average price of the first candle of the day, okay? So, just as trading starts, calculate an average price. What is an average price? Well, in the case of this indicator, it s pretty simply the high of the candle plus the low of the candle plus the close of the candle. So, those three data points, and just divide it by three. So, we take the candle, high, low, close, add them all up, divide by three, and that sort of gives us an average for that candle. Now, to build in a volume element, we multiply that by the candle volume, okay? So, there we are. So, heavy volume candles are going to have a larger weighting, and smaller volume candles, smaller.
Volume minutes are going to have a lower weighting in the calculation of our average here, the VWAP line, okay? Now, our third step is to divide by the total volume for the day so far. Now, obviously, on the first candle, the total volume for the day is going to be the same as the volume of that candle. But as we progress through the rest of the day, that total volume for the day is going to be going to change. There we go. That' s step number four. Step number five, we just sort of lather, rinse, repeat, calculate the next value. And by the way, by multiplying the average price by the volume, some people apply a label to this. This is known as the PV. Now, I need to double- check.
I don' t know exactly what a PV represents; I believe it' s sort of the period value, you know, whether that A highly valuable period because of strong volume or a less valuable period by a lower volume. But in any case, we calculate this PV value using those two inputs, and we just run that through this process over and over again. So, calculate the next PV on the next candle, and we finally just divide the whole thing by the total for the day. Add these together. So, we take that new PV, add it to the previous PV to give us a running PV total, a running value, and just divide that by the total volume. There we go. So, there' s your equation.
So, for those who like to know how these indicators are built, I did want to throw that out there so that we get it on the archive. I like to be complete in the education that I deliver. But all of this delivers this volume- weighted average price. Does that make sense now? So, we got the heavy lifting done. Now, let' s shift to what I call the fun stuff. How might this be used for the potential timing of entries and then for exits? So, today, right now, we' re looking at a stock where maybe the trader was already looking for an entry. So, today, right now, we' re looking at a stock where maybe the trader was already looking for an entry.
And it' s quite possible the trader doesn' t bother with this, and they just go ahead and buy the stock. Or, there might be time, yeah, the architect says, nice, that' s why the line gets smoother. There' s a bit of a smoothing effect, yes, but also just because the volatility of the stock tends to settle out through the trading day. Let me see. Michelle says, this VWAP is just volume and price. Bollinger Bands take into account volatility of standard deviations. Michelle, interesting. Interesting. Standard deviations, that' s a bit of a spoiler. What do you think these are up here and down there? Yeah. Let' s talk about these other lines. We now know what this VWAP line is.
Just on Thinkorswim, you' Re also going to see this pink line and this orange line, which are almost identical, Bollinger Bands, two standard deviation envelope lines. So, for those of you who aren' t familiar with standard deviations, you can see that the VWAP line is standard deviations. Believe me, it' s been a long time since I took my collegiate math, and I could really unintelligently explain what these are. But basically, standard deviations are employed in some of the hard sciences like math or engineering where we determine a normal, in this case, as represented by our VWAP. And then we attempt to address the question, well, when things get away from normal, how far do they normally travel before snapping back to normal?
So in other words, if this is our average price and the stock starts to get above average, how far might it typically go before coming back toward average, either up or down? And with a two standard deviation value, what we' re really looking at is what is a 95% probability that whether we go up or down, price stays within a given range. That' s what this is. Okay. So when we see this pink line and this orange line, about 95% of all the price activity, all the trading is going to be between those two lines. Getting outside of those two lines should be comparatively rare. Maybe two and a half percent of the time getting above pink, two and a half percent of the time getting below orange, most of the trading happening within that range.
And so for a trader who' s been waiting for price to get below average, for example, if it gets all the way down to orange, they know that at least mathematically, there are very few circumstances where it goes much further than that before starting to reverse. Okay. That' s the concept. Does that guarantee a reversal? No, that' s not what always happens. We don' t always have this reversion to a mean or a snap back to average. But for our traders, who' I' m looking for the timing of an entry, and they' re maybe trying to buy below average, that might be just about as low as they can expect price to go under sort of normal circumstances. All right. So yeah, that might be for some, they see that as an optimized entry.
Now you' ll see we touched here in an example from yesterday, came up a little bit and went back down again. So was it perfect? No. The difference over here on our scale was, you know, 10 or 15 cents. So we' re going to go back down again. So we' re going to go back down again. So we' re going Is it a huge difference? Not a big deal. But then we begin a rally. Okay. So for buyers who are looking to time entries, you know, they' re trying to refine their entries down to, you know, within a given hour, or even down to a specific minute, they might look for retracement down to that two standard deviation line and buy at that moment.
Now notice, if this trader were looking at the same signal on their daily chart later in the day, they did not ever get such a signal. Price never got below average. So that brings up a second potential signal that might be used. Well, if we can' t get below average and get an extreme, let' s define extreme as being down at the second standard deviation line. If we can' To get that, maybe the trader is willing to settle for, well, maybe I can just get it at or near average. A second potential signal is if price has been coming down from being solidly above average, and the trader is just waiting for it to get down to average, there we go, getting down to that VWAP line, that may be, especially as we start to rise back up from that again, or in other words, bounce off of that VWAP line, that could be a second potential signal.
Now, conceptually, we' re going to be looking at a second potential signal, which is a second potential signal. What' s going on behind the scenes here? Well, if we think about our institutional traders, if price has gotten down to that second standard deviation line, our institutional traders who are looking to maybe start to buy, that may be their own signal for entry. Getting price at lower levels where they' re not likely to, they' re not buying into strength and just adding strength on strength and adding fuel to an already explosive fire. Instead, what they may do is just cause the stock to pull out of a bit of a tailspin in the short term and push it more up toward the daily average, and thereby not have as extreme an impact on price.
Similarly, if the stock has been coming down from that upper standard deviation line and it' s coming down toward average, maybe just getting down to average may conceptually lead some institutional traders who are already looking to buy to start buying where they' re just paying average prices. And they' re buying when prices have been coming down at least for the last several hours. All right. So, SimArchitect, you know what? I don' t want to go into that. I appreciate the question. That was a little bit of field of what I wanted to discuss today. So, I' m going to kind of park that one. My apologies. Anyway, so there are some examples here on our chart where we retraced down to that lower level.
So, we' re going to look at that lower two standard deviation line or we pulled down and just bounced off of that VWAP line. But notice that it' s quite common to only get a few signals throughout the day. So, it might require some patience and some observation. Okay. Let' s maybe have a look at another stock. I think repetition is typically useful. Let' s switch back here to a one-year chart. And this is also going to give us the opportunity to look at our indicator on a day-to-day basis. So, let' s say we' re looking at a day-to-day basis. So, let' s say we' re looking at a day-to-day basis. So, let' Say we' re looking at a day-to-day basis.
So, let' s say we' re looking at chart, you' ll notice the indicator is so short-term. It just actually goes right through the middle of price activity. And this is why it' s not really commonly used. It' s hard to imagine actually how it might be used on a daily chart because it' s not doing anything other than just following price around. Is that terribly insightful? Probably not. It possibly could be used in place of, let' s say, just a line chart. So, let' s say, if we' re looking at a day-to-day basis, chart. But if we want a line chart, maybe we just use a line chart instead of using VWAP for something that it wasn' t really intended for. Okay. But in any case, let' s switch up our chart.
Let' s go to have a look at another one. How about Berkshire Hathaway? I' m not going to be talking about the A shares, which are hundreds of thousands of dollars. Let' s look at the B shares. With Berkshire Hathaway, it' s been having a nice year, consolidation for about five months here. We popped up, started to struggle at about 445 bucks. There was a couple of points of resistance there. And then it appears to have recently broken through. And maybe our trader is looking at this as, oh, there' A broken price ceiling that acted as support for the better part of a week. And now we' re starting to rise again. So on a daily chart, they may see a potential buy signal.
Now, once again, maybe our trader just says, fine, go ahead, let' s buy it. Not everyone is going to take a look at this. So let' s look at this. Let' s look at this. Let' s look at this. Let' s look at the additional steps to go to that more granular level and try to look for an intraday signal as well. But for those that are trying to conceptually add some refinement, again, even if it. So, only skimming a dollar or two here or there, if it works, maybe they take that step down, take a closer look, get out that magnifying glass, and look at that one-minute chart. So with this one, I want to talk about this for entries. We have received a few bounce entries off the moving average.
There was one right there. There was one right there. More recently, just today, there' s a bounce right here off of that. I call it a moving average. It' s actually the VWAP line. You' ll have to forgive me. Yeah, just within the last 10 minutes or so, and I don' t have control. When I kick these webcasts off, we just have to bring it up and see what we see, right? But it looks like we got a pretty good touch right there off that. That VWAP line here, that may be confirmation enough for some to say, well, we' re buying fairly close to average. However, what we' ve not seen, except right here one time in the last two days of trading, is price reaching that two standard deviation. Okay.
Dan, again, that' s a good question. Too far off topic for this discussion. Basically, the questions that have come in is, can this be used for trading? Other things, right? It' s beyond just stocks. Yeah. Conceptually, could timing of charts be used for trading other things? Yep. But I' m not just kidding. I' m just going to talk about the other things if that' s okay. All right. But for some traders, they may actually choose to customize the standard deviation lines here to make them a little bit more responsive. If we' re only getting comparatively rare entry signals, from this lower standard deviation line as it' s currently constructed, well, maybe what we might do is just come up here to the indicator, and let' s tailor it just a little bit.
I' m going to have to see how this goes, because I haven' t done this with Berkshire Hathaway yet. But instead of looking for, let' s say, two standard deviations away from our center line, let' s say the trader' s okay if we can just get one and a half below. And, you know, if they' re using it for sell signals, maybe one and a half above. I' ll talk about sell signals with some other examples in just a second, okay? But let me just click okay and click apply, and let me see what we get. All right. Well, that' s interesting. With Berkshire Hathaway, it seems that it tends to bounce when it gets down around that one and a half standard deviation line. Pretty simple customization.
You can see that it' ll also bounce when it gets down around that one and a half standard deviation line. So it tends to bounce on the high end off that one and a half standard deviation signal here. So if a trader' s looking for, as best they could, an optimized entry for today on, you know, having seen what we saw on the yearly chart, have there been very many better times to enter Berkshire Hathaway shares than right here, right here, right here, right here, or right here? No, pretty good examples, okay? So I' m just going to switch this back up. I just wanted to talk about maybe customizing this, because customization is a possibility, but I also want to talk about the opposite side of the trade.
How might VWAP be used if a trader is seeing maybe sell signals on a longer-term chart, and they Re just trying to refine those sell signals down to the hour or down to even in the minute? Art Vandelay says, do you have to use the one-minute chart? Let me show you this, Art. Let me click okay, okay, and click apply, click okay again. If we were to switch this up to, let' s say, a five-minute chart, it' s going to calculate the VWAP using five-minute timeframes. It' s going to use standard deviations for those timeframes, and it' s going to be substantially different. Can it be used on other timeframes other than a one-by-oneminute chart? Conceptually, it can be, but it gets a little bit clunky.
Let' s switch this now to some sell signal examples. Back here to the one-minute chart. Let' s actually switch this back to a one-day chart. Let me look at a couple of stocks. Let' s see what Meta' s up to. Okay, that' s what I was thinking. I noted earlier today, for some technicians who are looking to, maybe not for a lot of people, but maybe for a lot of people, they' re looking to, maybe they' ve been in a position where the stock has been running up, and they notice, boy, this has really been struggling at about $530, $540. Maybe the trader' s deciding with this big red candle today, it' s just not looking good for Meta.
Might be time to pull the plug, take whatever profits that might already be in an existing trade, whatever. But what if they want to look at a shorter-term timeframe to decide, well, am I going to sell right away? I' m going to wait until this afternoon. Let' s go back to that one-minute chart and talk about potential sell signals. And you' ve probably, I would guess, worked these out for yourselves. We still have our standard deviation lines. I' m still on that one-day, one-minute timeframe. And in this case, instead of buying when price is low, our trader might be looking to sell when price is high. There are two potential sell signals here.
The first, is if the trading happens to take us up to an upper extreme, as defined by our two standard deviation line, that may allow the trader to get out conceptually at highest prices that are available. Now, is it possible that we sell and then the price just continues on higher? Of course it is. Yep. It' s just that mathematically, given recent trading activity, that would be unusual. All right. So, selling if price has risen up to the two standard deviation line, that might be a time, a potential sell signal. A second potential sell signal is that if prices have already dropped below, and we re just trying to squeeze a little bit more out of the trade, while waiting to get back up to average, might be time to pull a plug finally on that position.
Now, you can probably look at this chart and say, well, I can see a difference in price. I can see a difference in price. I can see a difference in price. And if I' m still getting a trade, I don' t have to worry about that. So, we' re going to go ahead and start to look at the trend. And we' re going to start to look at the trend. We' re going to look at the trend. And if we hit that lower standard deviation line, and we started to rally and we didn' It quite gets up to our signal line, we might still be sitting in this trade as the stock continues lower. So, is it a perfect process? Of course, it' s not. Nothing' s perfect.
Let' s look at another example. We have the time. Let' s maybe go to that one-day chart again. Not one day, the daily chart. There we go. And how about we look to see what' s going on with Netflix? Netflix was doing something similar to Meta, coming up to an area at which it had previously struggled. The $700 seems to be an apparent price ceiling. Maybe our trader who' s just had a run up from under $600 to over $700, it' s a pretty good run. Maybe they' re already thinking, ' time to pull the plug', right? Same deal. Maybe we shorten up our time frame and just see. And this could be in the early hours of trading. We' re already getting a red candle.
Rally up to the upper standard deviation line, pull that plug. And in this case, the stock sells off. If we' re waiting to get back up here to get an average price for the day, it still has some work to do. All right. But guys, that is trading. VWAP to refine entries and exits down to potentially an hour or a minute. So I hope you enjoyed that discussion. I wanted to show you how these things are built. I wanted to talk about how they might be used for buy and sell signals and go through some examples of that. That' s check, check, check. We got it all done. So I' m going to let you go and enjoy the rest of our webcast before your weekend.
But as you go, I do have a couple of suggestions for you. Actually, they' re kind of requests. Yeah. First of all, follow Barb and me on X. If you' re not doing that already, you can find Barb on X at Barb Armstrong CS. You can find me on X at Cameron Mays CS. It doesn' t cost you anything to follow us. And it does provide you with another way to connect with your favorite presenters and to get some additional education here. Now, it' s also, yeah, it' s the best place for sort of more one-on-one interaction. As you reply to me, I can sometimes reply. I' ll reply right back to you, right? Now, another thing is to make sure that you' re subscribed to our Trader Talks channel on YouTube.
Just go right now and click on the subscribe button right now if you haven' t done that already. Because YouTube is the best place to find our archives for our previous webcasts. They' re organized by series, by topic. So you can get a very targeted, very specific education for just what' s important to you. You can find that under our playlist. But of course, you can also join our live streams. And finally, I do want to say thank you. How many of you clicked the like button? 39 people have already clicked the like button. That' s always appreciated. If you' re watching the live stream or you' re watching on the archive after the fact, if you like our webcast, make sure that you' re making a habit of every time, click the like button because it helps every time.
You know, just as you' re signing off, before you click the X and close down YouTube, just like and then close out. And that helps our webcast. It helps us find a wider audience and deliver this no-cost education. And it' s kind of a pat on the back for your presenters. It always, I describe it as it sounds like applause to me. So, I appreciate your applause. So for example, we had 39. I got 48 people, nine more people applauding. I' ll take it. Thank you. Everybody, thanks for giving me your time today. Go enjoy your Friday. Have a great weekend. I' ll look for you in a future webcast. I' ll also look for you on X. But whenever I see you again, until that moment arrives, I want to wish you the very best of luck. Happy trading. Bye-bye. Bye.
I just want to wish you the very best of luck. Happy trading. Bye-bye.
