Day Trading Indicator Set Up for Beginners 2021 (How to use VWAP, RSI, MACD Indicators)

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

Channel: Humbled Trader

Views: 935,635

Rating: 4.9411511 out of 5

Keywords: ricky gutierrez, timothy sykes, warrior trading, beginner day trading strategies, steven dux, penny stocks for beginners 2021, day trading for beginners 2021, day trading small account 2021, day trading under pdt small account, how to grow small account day trading 2021, how to use vwap, best indicators for day trading beginners, best trading indicator set up, how to use rsi indicator, how to use vwap indicator trading, vwap trading tutorial, how to use macd in trading

Id: 10RmE6gMdjs

Length: 11min 55sec (715 seconds)

Published: Wed Feb 26 2020