Jake and the Coffee Shop Magnet — Learning the Power of VWAP

Jake, a young marketing analyst in Chicago, had a ritual:
Every afternoon, around 2:00 PM, he would head to the local coffee shop just a few blocks from his office.

At that hour, the city streets were calm — the morning rush was gone, and the evening crowd hadn't arrived yet.

But the coffee shop?
It was always busy around that time.

Jake noticed something interesting:

• People would leave their offices, wander aimlessly, maybe check their phones, maybe window shop...
• But somehow, they all drifted back toward that same coffee shop — like iron filings pulled toward a magnet.

It wasn't the best coffee in town.
It wasn’t the cheapest either.

It was simply the center.
The familiar, stable place everyone returned to before heading back to work.

Jake smiled, watching it happen day after day:

"Even when people wander, they bounce back to the magnet."

Little did he know — he had just perfectly described how prices behave around VWAP in the market.

Connecting to VWAP

That evening, sipping a black Americano, Jake sat with his laptop open to his trading app.

He reviewed his day's charts and remembered what his mentor had told him:

"Think of VWAP (Volume Weighted Average Price) like the city’s coffee shop —
Institutions, big traders, and pros always drift back to it during quiet periods."

• VWAP is the "fair value" line for the day — the center of gravity.
• When prices wander away and then pull back to VWAP, it's a chance for a "bounce" trade.
• Especially during the calm midday hours when there’s no major news or chaos.

Jake realized:

• If price falls back to VWAP and shows green candles (buyers stepping back in) ➔ It’s like people coming back to the coffee shop after wandering.
• You can "buy the bounce" and sell near where the crowd had wandered earlier (previous highs).

It wasn’t just theory — it was real human behavior happening every day, in markets and in life.

The Real Trade — Apple (AAPL)

The next day, Jake decided to test it out.

He watched Apple (AAPL) — a stock he knew well and traded often.

• He opened a 1-minute chart with VWAP plotted.
• Morning action was wild — gap ups, fast moves.
• But by 11:30 AM, things calmed down.

He waited patiently — sipping his second coffee of the day.

Around 12:45 PM:

• Price drifted below earlier highs, pulling back slowly toward the VWAP line.
• Volume was low — no big news moving the market.
• It was like people wandering from the coffee shop, but the pull was still there.

Then he saw it:

A. Price touched VWAP.

B. Two small green candles formed right at VWAP.

C. Volume started ticking higher.

The bounce was beginning —
like commuters slowly refilling the coffee shop around 2 PM.

Jake placed his trade:

• Bought 100 shares of AAPL at $187.20, right at VWAP.
• Placed a stop-loss just below the VWAP line.

The Return to the Highs

Within the next 30 minutes:

• Apple’s price started climbing steadily.
• Buyers were stepping in quietly but surely.
• No huge spikes — just calm, steady flow.

By 1:20 PM, price approached the morning’s previous high near $188.50.

Jake sold his shares at $188.40 — locking in a clean, smooth intraday profit.

No chasing.
No panic.
Just riding the natural reversion back to the "magnet".

Lessons from the Coffee Shop

That evening, Jake sat by his window, watching Chicago’s city lights twinkle on.

He wrote in his trading journal:

*"Markets behave like people.

They wander. They explore.
But in the calm, they always drift back to the familiar — the center.

VWAP is the coffee shop.

Buy when they bounce back home."*

Jake’s Key Takeaways

Simple Memory Trick:

☕ Wandering back to coffee shop = Price bouncing at VWAP ➔ Buy.
🚶‍♂️ Leaving again toward afternoon = Reach previous highs ➔ Sell.

Final VWAP Bounce Day Trading "Cheat Sheet"