smb capital 9EMA VWAP strategy

 The SMB Capital "Fashionably Late Scalp" is an intraday strategy targeting momentum reversals by waiting for a stock to establish a clear trend. It uses the 9 EMA and VWAP crossover to signal an entry, with a calculated measured move for profit-taking. [1, 2, 3]

For an in-depth breakdown of how to identify the momentum shift and manage this trade, you can watch this video tutorial:

The Mechanics of the Setup

The strategy is essentially a trend-following continuation play that confirms the direction rather than attempting to catch an exact bottom or top. [1]

1. Identification

Wait for a stock to make a strong initial move and establish a Low of the Day (or High of the Day for a short).
The price then reverses and heads back toward the VWAP, which often acts as dynamic support/resistance.
Watch for the 9 EMA to cross over the VWAP, confirming that the new trend is taking hold. [1, 2, 3]

2. Entry Triggers

The "Fashionably Late" Entry: Enter a position after the 9 EMA crosses the VWAP and upward momentum has firmly resumed. This confirms that larger buy or sell programs are re-engaging rather than just testing a moving average. [1, 2, 3, 4]

3. Risk Management & Profit Targets

Hard Stop Loss: Place your stop just below the lowest point of the pullback. A common rule used in this strategy is to place a hard stop at about \(\frac{1}{3}\) of the distance between the VWAP and the low of the day. [1, 2]
Measured Move Exit: Measure the distance from the Low of the Day to the spot of the 9 EMA/VWAP cross. Use this measurement as your profit target, exiting the position once the stock reaches one measured move above the cross. [1]

Best Practices & Confluences

Market Context: Use liquid, "in-play" stocks that move at least $3 to $5 daily or have a clear fundamental catalyst (like earnings or news) rather than trading low-float, highly volatile stocks. [1, 2]
Timeframes: This setup is typically executed on the 1-minute or 5-minute charts for intraday scalping. [1]
Volume Confirmation: Ensure that price action is backed by relative volume, signaling institutional participation rather than retail noise.