I’m out traveling today in the Big Apple, so we didn’t have our regular morning session. Instead, I’m writing about something important we covered in a VIP Trade Room this week.
When it comes to trading, understanding the difference between a "run day" and a "rotation day" is critical to knowing how to position yourself for success.
A run day is when the market moves in a strong, directional way — either up or down. Volatility is high, and the price action doesn’t look back. These are the days when the market picks a direction and sticks with it, and they’re often driven by major catalysts — like earnings reports, Fed decisions, or big economic data.
On run days, you want to trade breakouts. If a stock breaks a key resistance level, chances are it’s going to keep running, and you want to ride that momentum.
But not every day is a run day...
That’s where rotation days come in. Rotation days are more like a balancing act — markets move within a range, and the price action tends to bounce back and forth.
You’re not going to get that big, sustained move in one direction, but you can take advantage of pullbacks to key levels like the VWAP (volume-weighted average price) or support zones.
On rotation days, the market is essentially catching its breath after a big run, rebalancing and digesting recent gains or losses.
A key to successful trading is identifying which kind of day it’s likely to be. If you’re coming off a big run day with strong volume, chances are the next day could be a rotation day, where the market consolidates.
On a rotation day, buying breakouts can lead to frustration because the market will likely pull back and undo those moves. Instead, you want to focus on buying at support or near VWAP.
On run days, however, you can be more aggressive, riding the wave of momentum as stocks continue to push higher or lower.
Understanding the rhythm of the market — whether it's a run day or a rotation day — can give you the edge you need to make smarter trades and avoid unnecessary losses.
It’s all about adapting to the market's behavior and knowing when to push for momentum or sit back and play the range.
I hope that helps!
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