<< there is more to it than just a break away from the
VWAP>>
Yes, there is ‘more to it’ --- which is really about how good your short-term trading (entry/exit) skills are, not about
skew. Unlike most of my set-ups, this set-up is really about the lack of a directional bias for the set-up. As Linda Rashke says, you are better off without a directional bias on the exit of a coil.
The pattern here is narrow-range breakout entry – an excellent core technical concept that acknowledges a markets tendency to alternate between ‘trend’ and ‘range-trading’ and specifically, the consolidation that often occurs just prior to a trending move.
Trade location is advantageous because this set-up is all about being early-on in a potential trending situation. Proper entry should be somewhere not too far from the equilibrium point with risk defined as somewhere on the opposite side of the equilibrium point (after entry). With these as guideline rules, you simply cannot get into deep doo doo.