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Day Trading Indicator Set Up for Beginners 2022 (How to use VWAP, RSI, MACD Indicators) - YouTube
Channel: Humbled Trader
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day trading indicators which are the
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best indicator settings on your broker
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platform and how exactly do you use them
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one of the most commonly asked question
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on my day trading channel besides
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whether I'm single or not is what
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indicator do I use and which ones are
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the best that's gonna make you millions
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of dollars of Lamborghini money and as
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somebody who's been day trading for the
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sixth year now I've certainly gone
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through lots of indicators in trading
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including from the MACD RSI V WAP
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Ichimoku cloud Bollinger Bands Smashing
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a like button and the list just goes on
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and on I personally do not suggest to
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rely on indicators in trading but I get
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it
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if you are a beginner trader this is
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where people usually like to get started
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with finding the perfect entries and
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exits I traded with many indicators
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myself while I was getting started well
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I no longer use any more indicators in
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trading besides V WAP I still know a few
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things about all these various
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indicators and I found the best way to
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use these indicators in trading is in
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pairs meaning that a lot of indicators
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are not that useful on their own but
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when you put two together such as the
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RSI in the MACD or the V WAP and the
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EMAs they become very powerful so in
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this video we'll be talking about the
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most popular indicators out there and
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how to best use them for day trading
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beginners as well as why I think are the
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problems associated with relying on
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these indicators once again there's no
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right way or wrong way to using them
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it's all up to your personal trading
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style so first and foremost a pair of
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indicators that most traders love to use
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right now is the MACD and the RSI MACD
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stands for moving average Convergence
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divergence it's a trend indicator
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meaning that this indicator tells you
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when there's a reverse of trend coming
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along whether the stock is starting to
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break out to the upside or selling off
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to the downside and how do you set up
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this MACD indicator by default this is
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what the settings look like in
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thinkorswim and you can do the same in
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any of your broker platforms again you
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want to you
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the default settings of twelve twenty
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six and nine because the whole point of
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using these trading indicators is that
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you see what a crowd is seen right MACD
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is a trend indicator you want to see
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where the buying or selling money flow
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changes so basically when the two lines
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the blue line being a fast line in the
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white line being a slow line starts to
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cross one another
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that means the trend is starting to
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change you can see on this chart when
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the blue line crosses over the white
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line and the histogram starts to turn
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red to green the stock spce started
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trending up higher and higher and when
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the blue line crosses beneath the white
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line and the histogram starts to turn
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green to red that's when the stock is
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starting to sell off but wait remember I
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said that this MACD indicator works best
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when it's paired up with RSI RSI this
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indicator is the momentum indicator that
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tells you when a stock is overbought or
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oversold a stock is considered
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overbought when the RSI crosses above 70
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an approaching 90 this means that
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there's potentially too much buying
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volume to the upside and we could
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potentially be near the top and
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vice-versa a stock is considered
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oversold when the RSI indicator drops
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beneath 30 meaning that there's too much
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emotional selling to the downside and a
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stock could potentially be at the bottom
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and we could bounce really soon
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again same for the RSI indicator
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settings you want to use the default the
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whole purpose of using the RSI indicator
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is to try to pick the top in the bottom
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of the stock which is kind of similar to
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MACD the trend indicator and that's why
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they work pretty well together just by
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itself stand-alone the MACD is pretty
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much a lagging indicator because it
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takes a while for the fast line in a
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slow line to converge which is fine for
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swing trading but for day trading where
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every single second counts and the
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precision and entry is crucial it's not
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exactly ideal
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RSI on the other hand I find it to be
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pretty early just by itself as you can
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see from this example the RSI
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takeda crosses above 70 and starts
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turning red at this point but the stock
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keeps on going higher for the next ten
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minutes or so and it's the same thing
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the other way around to the downside so
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that's why it's a good idea to combine
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MACD with our side so when you see the
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MACD lines crossing already but the RSI
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is not hitting 70 yet it's probably
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still fine to look for an entry long and
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when you see your RSI is starting to
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turn red don't worry
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check your MACD and see if the two lines
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are far away from crossing and if that's
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the case don't worry about it and stay
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in the trade longer until the MACD
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confirms the oversold RSI is just there
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to remind you that there could be a
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trend change coming soon same thing if
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you're trying to look for a bounce entry
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on the long side you can see the RSI is
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indicating an oversold condition that
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means you can start looking for an entry
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soon but the MACD hasn't confirmed the
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crossing to the upside so you can wait
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for both of these indicators to align
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before taking an entry long so as you
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can see by using this RSI and MACD
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indicator pair it allows you to see the
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potential trend changes coming soon but
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it still requires you to be patient and
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wait for your entry instead of guessing
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where the top of the bottom is and just
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jump right in I personally found this
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indicator pair works better when you're
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trading less volatile mid cap and large
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cap stocks not so much when you're
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trading low floats penny stocks though
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is this MACD and RSI gonna give you a
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hundred percent win rates in day trading
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absolutely not
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nothing is 100% guaranteed in day
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trading the better indicator pair to use
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for low flows penny stocks is the V watt
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and then I am a V WAP stands for volume
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weighted average price it indicates
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relative strength or weakness of a stock
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so if a stock is trading above V WAP
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that means the stock is overall polish
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on the day and there's more buying
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volume in the stock and vice-versa if a
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stock is breaking beneath V WAP
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that means the sellers have controlled
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the stock in a
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is relatively weak this is just the most
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general way people use view up it
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indicates whether the stock is bullish
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or bearish short-term and if you see a
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stock trading Justin Brown v WAP maybe
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holding above it for a little bit about
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breaking down for a few seconds and
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coming back up and then reject it again
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that generally means the stock is choppy
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and the direction is undecided or that
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could mean that they are trapping around
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V WAP on the long side and a short side
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and you hear me say that a lot in my
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recap videos because V WAP is an
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extremely general strength indicator how
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every trader uses it in trading is gonna
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be slightly different and how hard and
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how far away the stock pulls away from
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the V WAP could mean a potential
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extension we'll talk more about via
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webchat an extension later on so you can
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add view up here in think we'll swim
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study settings again just use a default
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settings I never try to change any of
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the numbers up here you can change the
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colors if you want in the V WAP tab very
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important though make sure to turn off
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upper bed and lower band you just want
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to use a default V WAP at the moment I'm
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just using V what all on its own but I
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found that in the past using the WAP
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combined with an eye EMA works really
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well when you're trading low flows penny
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stocks EMA stands for exponential moving
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average which tracks the price change of
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the stock over a period of time a very
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common question many beginner traders
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have is what's the difference between
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EMA and SMA simple moving average
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compared to smh the EMAs put more weight
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on the current price fluctuations so it
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updates a lot faster to recurrent
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changes and it's more ideal for intraday
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trading on the other hand the SMAS
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update a lot slower because it
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calculates all the price changes over
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the set period of time equally so in my
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opinion it's better to use it for swing
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trading
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what does 9 a.m. a and V what pair does
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really well is that they indicate to you
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a potential start of a strong breakout
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again you can set up as 90 ma by going
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to studies in
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go swim and look for moving average
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exponential and just put in I in the
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length
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some other common ones the traders love
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to use are the 13 EMA and the 15 EMA and
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honestly you can't tell much difference
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again this is just my own opinion as a
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trader who no longer use most of these
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indicators out there I'm sure there are
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people who swear by it
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so using this V whoppin IEMA is very
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simple since V walk shows you the
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relative strength that we talked about
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earlier and Nighy ma shows you the trend
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so if you put the two together we'll
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show you the strongest change that's
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about to happen which is a breakout so
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in this instance you can see that when
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the white EMA crosses over V walk to the
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upside that's where the stock squeezes
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very strongly to the upside and when the
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EMA crosses beneath V whap that's when
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the stock is very weak and starts to
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sell off the further the white EMA pulls
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away from V WAP the stronger the stock
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is to the upside so that tells you to
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not fight the trend just buy the dips if
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the stock is strong or short the pops if
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it's weak now that you've seen the two
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indicator pairs that I recommend using
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for beginner traders you must be
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wondering why did I stop using them in
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the first place and my answer to that is
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using indicators in my opinion is a
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distraction from observing the real-life
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price action of the stock all these
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indicators of course they look
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picture-perfect after the fact
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just like memorizing patterns right if
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you're staring at indicators all the
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time you're not observing the little
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nuances in the price action regarding
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who is trapped in pain and where the
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momentum could potentially be going when
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trading in the moment in real time how
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hard a stock rejects the resistance and
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how hard the bounces offer support
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that's price action that's the only
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indicator that's not gonna lag and it
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gives you the best anticipation and
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confirmation when you're picking your
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entries and exits don't get me wrong
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though using the indicator pairs that
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talked about earlier it's a good way for
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beginner traders to start seeing the
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trend
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Changez and where the stock could
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potentially be extended to the upside or
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downside you have to start somewhere
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right but I would recommend once you
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start getting a hang of it in a couple
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of months to start looking at a
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candlesticks just by itself without
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relying on indicators
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I think they'll give you a better read
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of a stock and speed up your learning
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process like I said the only indicator I
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use nowadays is V Watt and volume so if
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you want to see a dedicated video on how
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I use these indicators and how to use
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them to identify loan traps and short
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traps let me know in the comment section
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below and also what's your favourites
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indicator I'm always interested in
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hearing what other traders are using so
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let me know below as well thank you guys
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for watching as always I'm the humble
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trader and I'll see you guys next week
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