{"id":2235,"date":"2019-05-27T06:00:27","date_gmt":"2019-05-27T13:00:27","guid":{"rendered":"https:\/\/www.steadytrade.com\/?p=2235"},"modified":"2019-05-26T17:58:42","modified_gmt":"2019-05-27T00:58:42","slug":"vwap-back-testing-and-rising-to-the-challenge","status":"publish","type":"post","link":"https:\/\/www.steadytrade.com\/vwap-back-testing-and-rising-to-the-challenge\/","title":{"rendered":"VWAP, Back-Testing, and Rising to the Challenge"},"content":{"rendered":"<div id=\"backtracks-player\" style=\"max-width: 100%\" data-bt-embed=\"https:\/\/player.backtracks.fm\/st\/steadytrade-com\/m\/ep-99-vwap-backtesting-and-rising-to-the-challenge\" data-bt-theme=\"dark\" data-bt-show-description=\"false\" data-bt-show-comments=\"false\" data-bt-show-art-cover=\"true\"><\/div>\n<p><script>(function(p,l,a,y,e,r,s){if(p[y]) return;if(p[e]) return p[e]();s=l.createElement(a);l.head.appendChild((s.async=p[y]=true,s.src=r,s))}(window,document,\"script\",\"__btL\",\"__btR\",\"https:\/\/player.backtracks.fm\/embedder.js\"))<\/script><br \/>\n<span style=\"font-weight: 400;\">You have questions &#8230; and SteadyTrade hosts Tim Bohen and Stephen Johnson have answers.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In today\u2019s episode, the mighty duo tackle four pressing trading questions from listeners. Listen in for their take on VWAP, backtesting, getting out of a trading slump, and more.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Traders of all levels can benefit from the answers to these listener questions! <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Now, on to the questions&#8230; <\/span><\/p>\n<p><b>Randy: <\/b><i><span style=\"font-weight: 400;\">How do you use VWAP as an indicator \u2014 and how do you set it up on a screener?<\/span><\/i><\/p>\n<p><b>STP answer:<\/b> <a href=\"https:\/\/stockstotrade.com\/why-vwap-is-so-important\/\"><span style=\"font-weight: 400;\">VWAP<\/span><\/a><span style=\"font-weight: 400;\">, which is short for volume-weighted average price, is a popular technical indicator with traders. It shows where the most volume is in a stock and displays as a basic line on a stock chart. It\u2019s simple to read: If the price is above the line, it\u2019s above VWAP. Below the line, it\u2019s below VWAP. \u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">So what\u2019s the benefit of VWAP? Basically, it\u2019s a good way to determine whether the action around a stock is bullish or bearish. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">You\u2019ll learn some great tips for how to use the VWAP, how traders are currently putting it to creative use, and how to screen for VWAP most effectively on StocksToTrade or any software! \u00a0<\/span><\/p>\n<p><b>Paula: <\/b><i><span style=\"font-weight: 400;\">As a fairly new <\/span><\/i><a href=\"https:\/\/www.timothysykes.com\/millionaire-challenge\/\"><i><span style=\"font-weight: 400;\">Tim Sykes&#8217; Trading Challenge<\/span><\/i><\/a><i><span style=\"font-weight: 400;\"> student, Paula is curious about how to maximize the program. Both Tim and Stephen are former Sykes students, so what\u2019s their advice for making the most of the Challenge and actually getting started trading? <\/span><\/i><\/p>\n<p><b>STP response: <\/b><span style=\"font-weight: 400;\">Since both Tim and Stephen were once Trading Challenge students, they have a lot of anecdotal advice to share. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Stephen talks about how it\u2019s all about \u201clearning, practicing, and repeating\u201d to reinforce the lessons, noting that \u201cthe more times you fail, the closer you are to success.\u201d \u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Both Tim and Stephen address some of the biggest goals for any new trader: figuring out what stocks to trade and learning how to to create a great watchlist. They offer tips from their own experience on how to build better watchlists, how to graduate from paper trading to intelligent live trading, and why you should NEVER copy another trader. <\/span><\/p>\n<p><b>Jeff:<\/b> <i><span style=\"font-weight: 400;\">What is backtesting? Also, Jeff wants to know if the hosts have any advice &#8230; He\u2019s been trading for about four months with a small account. And while he started strong, he\u2019s now down by 50%. Any tips?<\/span><\/i><\/p>\n<p><b>STP response: <\/b><span style=\"font-weight: 400;\">Backtesting is \u2018cool\u2019 according to Tim, but not much more. To the uninitiated, this is where you pretend to travel back in time and try your hand at a trade that\u2019s already happened. He talks about backtesting issues, including the fact that most penny stocks will crash and that backtesting can trick you into a false sense of security. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Our hosts cover better real-time alternatives like paper trading and looking at actual stock charts.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">They also offer helpful tips for getting out of a trading slump, including reducing your positions and sticking to paper trading for the short term. As Tim puts it, \u201cdon\u2019t let your account grind down into oblivion when you\u2019re in a slump!\u201d<\/span><\/p>\n<p><b>Chris:<\/b> <i><span style=\"font-weight: 400;\">How can we convince Stephen to play long, since he trades long plays as shorts all the time? Also, can you talk about restrictions on pattern day trading (PDT) and margin accounts?<\/span><\/i><\/p>\n<p><b>STP response:<\/b><span style=\"font-weight: 400;\"> According to Stephen, here\u2019s the real question: \u201cHow can Stephen be intelligent when cutting losses in shorts?\u201d He and Tim critique his recent trades and evaluate whether Stephen should be playing long or short. You may be surprised by their thoughts! <\/span><\/p>\n<p><span style=\"font-weight: 400;\">To address the second part of the question, Tim and Stephen talk about trading accounts, including the difference between cash and margin: <\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><b>Cash account:<\/b><span style=\"font-weight: 400;\"> You can only trade with what\u2019s in your account. <\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Margin account: <\/b><span style=\"font-weight: 400;\">You can trade two, four, or even 10 times your worth, leveraging up. <\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">They get into the advantages and disadvantages of each, including how losses can mount quickly with margin accounts and how cash accounts are great in terms of responsibility but don\u2019t typically offer traders the opportunity to sell short.<\/span><\/p>\n<p><b>ROAN Update! <\/b><\/p>\n<p><span style=\"font-weight: 400;\">Be sure to listen in to hear the latest in Stephen\u2019s ongoing ROAN trade saga!<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Got a Question? <\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Do you have your own trading-related question?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If we choose your question to answer on air, you can win a SteadyTrade mystery gift box! So don\u2019t be shy &#8230; send questions via the <\/span><a href=\"https:\/\/www.steadytrade.com\/\"><span style=\"font-weight: 400;\">SteadyTrade<\/span><\/a><span style=\"font-weight: 400;\"> website, <\/span><a href=\"https:\/\/www.youtube.com\/channel\/UC5pPaJfbfRHQ1msJ4bSj_dQ\"><span style=\"font-weight: 400;\">YouTube<\/span><\/a><span style=\"font-weight: 400;\">, or by <\/span><a href=\"mailto:admin@steadytrade.com\"><span style=\"font-weight: 400;\">email<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Thanks for tuning in to the SteadyTrade podcast. Stay tuned for weekly episodes featuring the hottest topics for aspiring traders!<\/span><\/p>\n<p><b>How awesome do you think this episode is? Leave us an <\/b><a href=\"https:\/\/itunes.apple.com\/us\/podcast\/steady-trade-the-profitable-side-of-trading\/id1275946076?mt=2\"><b>iTunes review<\/b><\/a><b>! <\/b><\/p>\n","protected":false},"excerpt":{"rendered":"<p>You have questions &#8230; and SteadyTrade hosts Tim Bohen and Stephen Johnson have answers. In today\u2019s episode, the mighty duo tackle four pressing trading questions from listeners. Listen in for their take on VWAP, backtesting, getting out of a trading slump, and more. Traders of all levels can benefit from the answers to these listener [&hellip;]<\/p>\n","protected":false},"author":2283,"featured_media":2236,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":""},"categories":[3],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>VWAP, Back-Testing, and Rising to the Challenge - SteadyTrade.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.steadytrade.com\/vwap-back-testing-and-rising-to-the-challenge\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"VWAP, Back-Testing, and Rising to the Challenge - SteadyTrade.com\" \/>\n<meta property=\"og:description\" content=\"You have questions &#8230; and SteadyTrade hosts Tim Bohen and Stephen Johnson have answers. 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