MACD Trading Strategy For Intraday Trading – Part 3 (English) πŸ”₯πŸ”₯


– So, on this third
part of the MACD trading strategy series video, I will be showing you how you can use MACD indicator on a five-minute timeframe chart. So, the reason why
I delayed releasing this video on MACD indicator was because first I
wanted you to understand how to combine VWAP indicator, RSI indicator, and
volume analysis on a five-minute
timeframe chart. So, now that you have seen about three to four videos
on the same subject, now I have decided to release
the MACD indicator video because this will
help you understand all of the concepts
that have been discussed in this video better. Now, make no mistake
that trading on a five-minute timeframe
chart is difficult, but with the right set of tools, and with the right
set of analysis, you can successfully trade, even on a five-minute
timeframe chart. The essential
fundamentals of trading do not change in respective of which timeframe you trade. So, let us now get
back to the video. So, what I’ve done
is I first explained the concept using
Bank Nifty chart, and then I have
illustrated the concept with a trade I did
using MACD indicator, VWAP indicator, and simple
price volume analysis. So, towards the
end of the video, I will again make an appearance, and I’ll give you
three pressure points that you will face
when you’re trying to trade on a five-minute
timeframe chart. – [Commercial Advertiser]
Click on the subscribe button and bell icon to get
instantly notified when a new video is uploaded. Thank you for subscribing. – So, before we get started, let me just show you
the chart setup here. So, here I have the
normal volume indicator. This is the MACD indicator with standard
settings, 12, 26, 9. This is the Bank
Nifty Future chart, and the orange line that you see is the VWAP indicator. The blue line that you see
is the MVWAP indicator. Now, for those of
you who don’t have access to Bank
Nifty Futures chart, I have done a
video earlier where I have given out
details from where you can get this for free. If you want the
link to that video where I have shown this, do let me know in the
comment section below, and I will leave a
link for the same. So, before we move forward, let me just remind
you of the two main rules that we discussed
in part one and part two of the MACD trading
strategy series. So, the first rule
was to realize the importance of zero line. That is the zero
line that determines whether you should
be looking for a long trade or a short trade, and the second rule was to check for both MACD and signal line with respect to the zero line. That is in this case
both MACD and signal line is above the zero line, so I’ll only be
preferring to go long in this instrument, and if you just come back
before November 25th, both MACD and signal
line are below the zero line here, and in this region, I’ll be only considering to
take short trades. So, these were
the two main rules that we saw in part
one and part two. We will discuss right from
basics of MACD indicator to some advanced concepts. So, what I’ll do in this video is that first we
will cover rules when it comes to
five-minute charts, that is when you
want to take either a long trade or a short
trade with MACD indicator, and then I’ll be
showing you one trade I did this week
just to demonstrate this as an example. So, one of the first
things that I like to see is that
when MACD indicator and signal line is
above the zero line, how much impact does
this have on price? So, what I mean by here is that from November 25th
to November 26th, MACD indicator and signal line was clearly above the zero line. So, look at what happened with respect to price movement. So, price moved from
31,100 to about 31,700, that is when both
MACD and signal line were above the zero line. Now, the reason I’m
showing you this is because this has
a direct implication of how you have to
use MACD indicator on a five-minute
timeframe chart. Now, it is usually
said that trading with MACD indicator on
a five-minute chart, or let’s say even a ten-minute
chart is not possible, but that entirely depends
on how you use it. What I’m gonna show you here is how you can combine simple
tools like MACD indicator, volume, VWAP indicator, and
a multiple timeframe approach to time your trades better. Now, do take a look at this case where MACD indicator
and signal line were more often then
not below the zero line. So, when first
cross over happened, and MACD and signal line
moved below the zero line, price was somewhere at 29,450. So, look what happened when MACD and signal line started coming out of the zero line, whether you wanna
take this instance or this instance or
this region here. So, when the crossover
happened on the down side and both MACD and signal line
went below the zero line, so price was at 29,450. Even at this instance
price is at same level. If you look at
this instance here and the region
that I marked here, price is roughly
at 29,250 level, so which means over a period
of two to three sessions while MACD has moved
below the zero line, moved to minus
80, and then again moved above the zero line, price has relatively been flat. So, the main reason
why I say this is because for the
majority of period of time, both MACD Indicator and signal line were clearly below the zero line, and yet the impact
of this on price has been negligible. Now, this is vital
piece of information because whenever you
see this happening, look at what happens as
time progresses forward. In most of the cases, when MACD and signal line
is below the zero line or above the zero line, and you cannot see substantial
impact on the price, trend usually reverses
in the short term then, and starts heading in
the opposite direction. So, in this case,
despite of MACD and signal line being
below the zero line, impact on price was
relatively less. So, look what happened
couple of sessions later, price started moving higher. Now, this is one pattern
that repeats so often, and this actually
forms the premise of how you will be
using MACD indicator on a five-minute
timeframe chart. So, before we head
forward let me now give out the three
specific rules that you will require
when you’re trying to trade on a five-minute
chart with MACD indicator. The first rule that
you need to check is what is the
position of MACD line and signal line with
respect to the zero line? Now, along with this, you have to assess
the impact of MACD and signal line on
recent price movement. Now, what I mean by this is that if MACD and signal line
are above the zero line, then has price
headed higher or not? In case price has
not headed higher, then that should be
taken as a warning sign. Rule number two, now
you also need to check for trend bias on a
higher timeframe chart. For this, I’ll now change
the five-minute chart to a fifteen-minute
timeframe chart. Now, on a fifteen-minute
timeframe chart, in case you’re
looking to go long on a five-minute timeframe
chart with MACD indicator, you’d need to make sure
that both signal line and MACD line are clearly
above the zero line. I hope this is clear. Rule number three,
before taking the trade, you then need to assess
the overall structure of VWAP indicator
and MVWAP indicator. So, these three rules together will help you take trades on a five-minute timeframe chart
with MACD indicator alone. So, let me now
explain what happened in Bank Nifty over the
last two to three sessions and why I decided
to take the trade that I’m gonna show
you as example. So, first I’m going to show you structure of Bank
Nifty and what I saw, and then I’ll be
showing you the actual option chart I considered
while take the trade. So, on December 5th
after the RBI policy, both MACD line and signal line decisively moved
below the zero line, and from then on, for a majority of
period of time, both MACD and signal line were clearly below the zero line. So, look at what
happened to price. Price moved from
31,800 to about 31,200 as of December 9th, that is when market
opened on December 9th. So, clearly impact of
MACD and signal line being below the zero line was clearly felt on price. Now, don’t get me wrong here, I know MACD and signal line is derived out of price, and it is not visa-versa that MACD and signal line would determine where price heads, but when you are
using an indicator, let’s say a MACD
indicator or RSI indicator or Stochastics or any
other technical indicator, you have to assess in terms of what that indicator is doing, and then relate that with price. I hope this aspect is clear. So, between December 5th and when market opened
on December 9th, MACD and signal line were clearly below the zero line, and this clearly had
an impact on price, as price moved from
31,800 to 31,200. Now, as December 9th’s session progressed forward,
look what happened. MACD and signal line went
from minus 80 to positive 40, and the point where
crossover happened was at this region, and here price is at
31,380 about level. So, when MACD and
signal both went from minus 80 to positive 40, look at the impact
that had on price. Price moved from 31,380 to just about 31,600. That is about roughly
200 points, not even 1%. So, now recollect the
rules that we discussed. When MACD indicator
moves substantially either from a positive
to negative zone or a negative to
a positive zone, that is with respect
to zero line, price movement
should be visible. If price movement
is not visible, than more often then not, you will see price moving
in the opposite direction. Now, based on what had
happened on December 9th, when market opened
on December 10th, I was setting myself up for a short trade in Bank Nifty, or I was going to use
Bank Nifty call options as an instrument to short sell, and this was mainly because both MACD and signal line
had moved substantially and despite of that, net price movement that we saw was almost negligible. So, on December
10th, if you see, I actually sold 31,500
call option at this region, and later in the day, I covered it
somewhere around 116. So, I had written it at 150, and I covered the
same position at 116. So, when I short sold
calls at this level, look what happened in terms
of MACD and signal line. So, both MACD and signal line went from minus 40
to about positive 20, but look at the net
impact it had on price. Price again remained
relatively flat, which meant that there
was high probability that price would start
moving lower again. So, that is why I short
sold 31,500 call option here because risk was
substantially lower, and I did know that this
trade would work in my favor. Now, do take a note at
VWAP indicator as well. From December 9th
and even before that when VWAP indicator moved
below the MVWAP line, trend for price was
clearly on the down side. So, when you combine
the information that VWAP indicator gave you along with the
retracement in price, which was negligible
when you compare it with the movement in MACD
and signal line, this short sell
trade was, again, not that difficult to take. Now, today is Tuesday, that is 10th of December, and you’re just about
a couple of sessions away from expiry. So, before writing calls, that is short selling
calls at this level, I did want to check
the overall chart of call option as well. So, let me now take
you to that chart. So, this chart that
you see in front of you is the 31,500 call option chart. So, I sold this at 150, and then I covered it at 116. So again, the
concept that we saw in Bank Nifty playing out with respect to MACD indicator, it was very evident with
31,500 call option as well. Now, the reason at
times you need to see options chart is
because option chart has a combination of price and combination of time
decay factor within it. So, as MACD indicator
has moved from minus 30 to about positive 10, look at the price movement
that has happened. Again, you don’t get to see that amount of price
movement on the upside. Now, on the flip side, when the crossover happened and MACD started moving lower, price eventually moved from 220 to about 120 rupees. So, downward movement when MACD and signal line
started moving lower was more evident
when you compare it with upward movement
in the price. So, between December
9th and December 10th, again, you see MACD
attempting to move higher and price remain
relatively flat. Look at how VWAP
indicator is clearly below the MVWAP indicator. This clearly suggests
that there are no significant strong
players in the market who are expecting any
significant upside. So, when this wide range
candle was forming, there are many retail traders who will just look
at this candle and go ahead and
buy into a stock. In this case, it
would be an option, but the thing is, you
need to take into account how VWAP indicator
is structured. Look at what MACD and
signal line are doing, and our third rule
was to look at the fifteen-minute timeframe chart. Now, if you look at
this section here, MACD and signal line are clearly below the zero line. So, while price was having
some sort of retracement on a five-minute timeframe chart in this region and
in this region here, on a higher timeframe chart, trend was clearly
on the downside, and this is actually
one of the key elements you have to consider
when you’re trying to trade with MACD
indicator on a five-minute timeframe chart. Now, on a standalone basis, trading on a five-minute
timeframe chart with MACD indicator
gets kind of difficult, but when you combine
this information with VWAP indicator with
higher timeframe chart, you can devise a set of rules that if you follow consistently, you would do well in the market. So, let me now give you
three pressure points that you will face while trading on a five-minute
timeframe chart. So, the first pressure point would be facing
frequent whipsaws, now what I mean here is that since five-minute timeframe is a small timeframe, you will be facing lot
of false trades here. Now, this means most
of the breakouts that you see will fail whether it is on the
upside or on the downside. Now, to counter
the same problem, we are going to refer to
a higher timeframe chart just to check the
overall trend bias. Now, as far as you combine
fifteen-minute timeframe and five-minute
timeframe together, you should still be
fine when you’re trying to trade such
smaller timeframes. Now, the second pressure
point you’ll face is more psychological in nature. Now, what usually
happens is that when a trader is trying to trade on a five-minute
timeframe chart, they usually think they need to close out trade very early. Now, this is a mistake, and this should be avoided. It does not matter if
you’re taking a trade on a five-minute timeframe chart or on a fifteen-minute
timeframe chart. As far as the trend
conditions are still valid, you should be looking
to carrying forward that trade whether it
is for the next day or for the next week as well. Now, the third pressure point that you’ll face is in terms of how many stocks to track. Now, this is one
of the most common mistakes that beginners make is that their watch
list is filled with about 50-60 stocks
that they want to trade on a shorter timeframe chart. Now, this is a mistake that is going to cost you dearly, and what I would suggest is to limit your watch list to
just five or six stocks, and then track those
on a consistent basis. If you can do this for
the next few months, you would automatically
start understanding behavior of the stock, and your trading
would get better as time progresses. As you take each trade, do not forget to document it, and especially if that
trade is giving you a loss, you should be making
detailed notes on a loss-making trade. The reason I say so is because profit takes care of itself, but it is the losses aspect that makes or breaks a trader. If you want get really
better at trading, you should get into the habit of documenting all your trades, most importantly trades that do not work in
your favor because these are the trades
that will help you becoming a successful
short term trader.

37 thoughts on “MACD Trading Strategy For Intraday Trading – Part 3 (English) πŸ”₯πŸ”₯

  1. Intraday Trading – https://bit.ly/2oDtH08

    Swing Trading – https://bit.ly/2JY4SDR

    Heiken Ashi – https://bit.ly/2NFgzAm

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    Market Profile – https://bit.ly/2r4q58h

    Futures Trading – https://bit.ly/2N8qijg

    Ichimoku – https://bit.ly/2r1WNqQ

    Stock Picking – https://bit.ly/36nUmPz

  2. This makes sense sir. As market is all about price + volume analysis. With help of vwap and mvwap we are analysing volume strength & volume indicator crossovers , and with Macd indicator we are analysing price strength & price indicator crossovers. Thanks sir

  3. excellent bro. shall i apply this technique in anyother scrip. i need banknifty future chart. thanks in advance.

  4. Thanks for such wonderful video.
    Need to know this method will apply on nifty index and other stock as well & for stock need to use on spot chart or future chart ?

  5. Knowing the trend and Multi-Timeframe analysis is so crucial …. Amazing video …literally nobody should expect this kind of knowledge for free πŸ‘‘

  6. Thanks for your time and effort. I have waited for this video for a long time but after completing the VWAP course I feel fulfilled. As you said this concept is an added advantage after the knowledge of VWAP. Thanks for the secret πŸ™‚ how to avoid whipsaw by using different time frame. Thanks a lot and have a nice time.

  7. Sir, you have great knowledge and you know lots of trading strategies. I wanted to know about the secret for this. How many hours daily you worked and what is your daily trading life cycle.

  8. It is good to see you again.

    New concept for me personally will try out the same.

    As far as I understand this video, sir you give importance to macd indicator and the price impact it had.
    If I can summarize you give more importance to price volume macd vwap mvwap combined together.

    Sir I have a doubt for the bnf fut chart which you used to explain one of your trades.
    There was breakout with a green candle but you took a short trade how do you know it it is good entry.
    Is it higher tf thing?

    Thanks very useful info.

  9. Thanku so much sir …I was waiting for macd intraday ……coz my broker doesn't give me vvap ….so I prefer macd most of time with combo of ema …,πŸ™πŸ™πŸ™πŸ™πŸ™

  10. Sir , please make video on how to decide but or sell decision on stock according to nifty trend . Thank you jiπŸ’“

  11. Thank you so much Sir. I was waiting for this bcos I am using almost same setup but I was worried Wether MACD will work in 5 min chart.

  12. thank you so much… seen your setup in background.. just wow…. intrested in your life journey to successful trader

  13. Hello Sir,
    I am ca final student.
    Beginner to market.
    It will be great if you share your initial journey.
    Like how you started, initial setbacks etc.
    It will be inspiring to all of us.

    And thank you for the wonderful vedeo.

  14. Thanks ! NIce Video- Also off topic – Could you please make a small video or blog on what should be hardware setup( no of screens, PCs ) for full time trader?

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