This Simple Vwap Strategy Could Change Your Trading Forever — Transcript

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1. 0:00These two indicators will 100% change
2. 0:02your trading career forever. Go to the
3. 0:04indicators tab and type in the words
4. 0:06VWAP VWAP. And for the second one, type
5. 0:09in the words [music] EMA on the
6. 0:11indicators tab. So, how do they work?
7. 0:13So, whenever you break below your VWAP
8. 0:15exactly right here, you want to use this
9. 0:17nine-moving-average as an area of
10. 0:19resistance [music]
11. 0:20and hold on to your shorts if you're
12. 0:22below it and your calls and your long
13. 0:24positions if you are above it. So, press
14. 0:26play.
15. 0:26>> Woo.
16. 0:27>> As you can see, the market holds below
17. 0:29this nine-moving-average, which is my
18. 0:31blue line. However, whenever the market
19. 0:33does this, [music]
20. 0:34it has a crossover right here on my
21. 0:36nine-moving-average, this is exactly
22. 0:38where I want to sell my position.
23. 0:40>> All right, guys. Simplicity, this is
24. 0:42what I love about this strategy. It's
25. 0:43simple. I love VWAP, it works really
26. 0:46well. But instead of putting these on
27. 0:47your chart natively, let's build the
28. 0:49indicator in LuxAlgo Quant, which is
29. 0:51exactly what we did with some nice
30. 0:53signals. And so, all I said was I want
31. 0:55to put a buy signal when price closes
32. 0:57above VWAP [music]
33. 0:58and a sell signal when it closes below.
34. 1:00And then an exit when it closes beneath
35. 1:02that nine or above the nine EMA. All
36. 1:05right, so let's test it out ourselves. I
37. 1:06got the code over to TradingView here.
38. 1:08We're at market open of today. Let's
39. 1:10play forward. We got market open. Now,
40. 1:12we just need price to close over VWAP
41. 1:15the first time of the day. Since we were
42. 1:16below it, we'd be looking for longs when
43. 1:18it closes over it. There's our buy
44. 1:20signal right there. I would end up
45. 1:21taking my long. Stop below the candle
46. 1:23that broke, in my opinion, is probably
47. 1:24the best. And really all I'm looking for
48. 1:26is that sell signal. And we get a exit
49. 1:28signal, as you can see right here, would
50. 1:30close under that nine EMA, gives us a
51. 1:3245-point trade. This is Friday the 31st
52. 1:35of July. Let's see if we get any trades
53. 1:36here. Okay, we did get a sell there. An
54. 1:38exit will only occur for a signal-wise
55. 1:41when we close over that nine EMA. So,
56. 1:43let's go ahead and play this out. Very
57. 1:45nice push. Wow. As you can see, the exit
58. 1:47ended up happening right here for 127
59. 1:50points. Here we are on July 29th. Let's
60. 1:52see. This is really good. We got the
61. 1:53exit signal way before the stop would
62. 1:55have been hit, so we would have only
63. 1:56lost 33 points. And we made 127 points
64. 2:00the day before. This is showing great
65. 2:01promise for a strategy I think we should
66. 2:03back test. So, I'm going to go back over
67. 2:04to LuxAlgo Quant, and down here there's
68. 2:06a button that says back test. I'm just
69. 2:08going to click that button, and then
70. 2:10LuxAlgo Quant's going to immediately
71. 2:11start back testing. Okay, wow, it's
72. 2:13actually not as bad as I thought it
73. 2:15might be. You can see there's a lot of
74. 2:16variable because the take profit depends
75. 2:18on the 9 EMA cross, but 50% win rate is
76. 2:22pretty good. What I want to do is
77. 2:23actually bring this strategy into
78. 2:25TradingView. So, I'm going to copy this
79. 2:26code [music]
80. 2:27over to TradingView, we're going to test
81. 2:28it as well.
82. 2:29>> [laughter]
83. 2:29>> Okay. So, this turned out quite
84. 2:31interesting. Even though it's a 30% win
85. 2:33rate because the take profits are so
86. 2:35[music] big in some scenarios, we're
87. 2:37looking at quite a nice equity curve
88. 2:39with a 1.6 profit factor. I'm honestly
89. 2:41impressed. Now, in his video, he does
90. 2:43talk about utilizing this with other
91. 2:45strategies. I agree with that. I think
92. 2:47VWAP is a phenomenal indicator. I'm not
93. 2:49a huge fan of the 9 EMA, but it's good
94. 2:51that it holds its own. But, if you want
95. 2:53this indicator or to use Quant on top of
96. 2:55this indicator, just comment the letters
97. 2:57AV and I'll send you a link.