VWAP TRADING STRATEGY – 5 TRADES In Stocks & Options (Day Trading) πŸ”₯πŸ”₯

– [Instructor] Welcome to
the video on VWAP Trading Strategy, where I will discuss
some of the recent trades I had taken in stocks
and in options. In some of these examples, I
will be covering entry and exit along with rationale
behind the trade, and I will also be talking
about trade management in general. I have covered day
trading in over 15 videos and link to all those
videos will come up at top right end of your screen. So let’s get started. All trades posted in this
video are the same trades that I had covered in
the Telegram channel. So the first case
here is of Tata Steel. In this trade, I
took entry at 345 and sold the same at
349 and then at 352. In this particular trade,
there were two main challenges. Number one, price had gapped up and it’s always
risk to buy the gap, and number two, the first
candle that was printed for the day was
that of indecision. Other than this
gap on this chart, there is actually no
visible sign of demand given how the first
candle had closed. So, look at the body
of this first candle, you can spot long
wicks and long tail, which actually represents
indecision in the market. My thought process at
this stage was to wait for a couple of more
candles to assess the underlying demand in price. The second candle
that was formed was a fairly bullish candle, and it completely engulfed
the body of the first candle. This was actually a sign
of continuation of trend. So, what I did was, I waited
for high of these two candles to be crossed and then
I entered the trade as the high was
taken out at point A. I finally exited the
trade at points B and C at 1% and 2% gains. Exit here was purely based on
formation of strength candles that is wide range candles,
after I took the entry. And do note here that price
had already gapped up, and hence I was more
inclined to book profits rather than to hold
the trade for the day. The second case here is
of Reliance Industries. In this trade, I
took an entry at 1375 and then exited at 1373. Price had again gapped up
in this particular chart and the opening candle
was not entirely strong. Long wick of this candle
that you see here, indicated supply at higher level and hence I did wait for
some more confirmation. Eventually, I took
entry at about 1376 at this particular candle and in hindsight, I
could have avoided this. My thought process at this
particular stage was that, I did think that the first
candle here would provide some sort of support
to the price, but in the end, price
simply kept drifting lower. In one of the earlier
VWAP trading videos, I had explained the relevance
of such wide range candles and hence my entry here
was not entirely wrong. As price drifted lower, I did
think of closing out the trade at point B, but I held on
as volumes on the downside were not expanding. So, I have not included
the volume chart. I simply forgot but in case
you have a Reliance chart for 16th of October, do
check out the volumes on this particular candle. In the end, I just managed
to get out of this trade at four rupees loss per stock. This case again is
a perfect example of why trading gaps
is little tricky. At times judging the underlying
demand is a bit difficult, and one is more prone to making
errors as trade management is not easy. If you are beginning
with VWAP indicator, then for the first few months,
prefer charts without gaps. As you gain more
experience in the market, you can then look into
trading gaps as well. The third case here
is of weekly options. In this trade, I entered Bank
Nifty options at 159 and 153, and eventually I
exited the same at 447. When the day began, opening
candle was actually strong and VWAP Indicator was
above MVWAP indicator. Second candle that
you see for the day, it was not entirely strong and hence I did not
take entry right away. Till about 11:30, the entire
trading session for the day was within the range of
these first two candles. Price then moved above
this range at marking A, that I’ve marked here and
this was actually my cue to go long in the market. So, do take a look
at volume as well. As price has moved
above the range, volume have clearly expanded. This is the kind of combination
that you have to focus upon. If you look at what happened
after I entered the trade, price simply moved
sideways and consolidated. Most of the traders here would
begin to doubt their decision and hence you need to be aware of this psychological mistake. At point B, C, and D, we then
get these strong wide range candles that reaffirm the
direction of price trend. So, I finally exited the
trade at candle E here because of the long
wick of this candle. This actually indicated
some supply ahead. Luckily price did not
move much post this, and this became a well
timed exit for me. The key message in this case
is to be patient for price to make a decisive move. At times price
consolidates sideways and one has to be patient
enough to wait on the trade. This 4th case here highlights the importance of setting
the right stop loss. In this case, I entered
Reliance Industries as this candle was
developing at 1381 and I exited the same at 1397. Opening candle in this
case was narrow in range and once the high of this
candle was taken out, I did enter the trade in
this particular candle. Stop loss for the trade
was set at swing low of this entire range. This candle if you see is
very similar to hammer pattern and this actually represents
some demand in this region. Post entry, price
actually consolidated and it did move lower. Most of the traders would
actually think of exiting trade at point B, but the thing
you have to note is that there is no range
expansion here, and even volumes did not expand. Then in the afternoon
session, candles C, D and E, reaffirmed the bias of trend. Do take a note here that
between these candles, C, D and E, there is not
one single bearish candle that indicates presence of
strong sellers in the market. I eventually exited the
trade somewhere here as session was coming to an end. So, in this case,
had I not set stop at this level, I would have
probably exited the trade at point B, since the low of the
entry candle was breached. You have to understand that
it’s absolutely crucial to know how to place
stop loss in day trading. I have done a separate video
on this couple of weeks back, and link to the
same would come up at top right end of your screen. This fifth case is
about assessing momentum and being with
trend despite couple of counter trend candles. In this particular trade, I
entered HUL at 1955 and 1958, and I exited the same at
1975, 1989, 1958, and 1980. So in the morning
session, VWAP Indicator was below the MVWAP Indicator,
and opening actually happened with a fairly
wide range candle, but if you look at this candle, this is not entirely bearish as volumes were not at all high. About 30 minutes later,
range of this opening candle was crossed at this point. And this was one of the
first clues that momentum was reversing for the day. Once price was above
VWAP Indicator and MVWAP, I then entered the
trade based on momentum at Point A and Point B. Technically this was not a
valid trade as VWAP Indictor was still below MVWAP Indicator, but based on momentum alone, one could have still attempted
to enter in the market. Price then quickly
moved from 1955 to 1980, at which point, I did
exit 50% positions at C & D candles here. After my initial
exit in the trade, price then moved lower
with this wide range candle that I’ve marked, but you
need to look at volumes again. As price was moving lower, volumes were clearly
on the lower side. During this entire corrective
phase that you see, I held onto the trade
just because volumes were not expanding. And finally as price
again started retracing
towards the top end of the range I
finally exited at point E and point F. So, in this particular case, I actually combined
the element of momentum along with volume
expansion criteria. As correction was
happening in the market, I did not panic and
I held on to my trade simply because there were weaker
participants in the market as volumes were not
at all expanding. So, through these videos,
I am trying to show more practical applications
of what we have covered in the previous VWAP
trading strategy videos. So, do let me know if you
like to see more such videos as this will help you
plan your trades better. So, for those of you who
are new to this channel, link to the VWAP
Trading Strategy videos will come up towards top
right end of your screen. Kindly consider
hitting the like button and sharing this video
if you find it useful. Thanks a lot for
watching this video guys. Take care and be safe.

Leave a Reply

Your email address will not be published. Required fields are marked *