Today we cover GRFX day trade.
This is a classic day trade pattern where price is up significantly in the premarket.
Right after the open, price moved sideways, establishing a solid base near or above the VWAP (Volume-Weighted Average Price) for about 15-20 minutes.
Eventually, price popped the intraday high/resistance level with some volume.
Price stabilized above the breakout point and started trending, establishing a steady 30-degree-angle rising channel.
Prior to the lunch hours, in our case just an hour later, price made a double top, and the rest of the morning session, price continued to move sideways.
The double top, and the inability for price to break and move pass that resistance, suggested that the day trade was done and price would eventually pull back. That's what happened
How to approach this scenario? Take profit (partial or full) and raise stops below the recent lows and/or the VWAP.
In our case, we took some profit off the table and raised the stop a few pennies below the VWAP. It was the right call and a good profit for the day (~40% gain in an hour)
Watch this video to get the technicals.
Good trading!
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