INTRADAY STRATEGY - PIVOT + VWAP + EMA

Summary

This YouTube video tutorial introduces a trading strategy for Nifty and Bank Nifty options, applicable to other indices and stocks as well. It focuses on using the Pivot Point indicator to identify resistance and support levels, alongside the Volume Weighted Average Price (VWAP) and the 20-day Exponential Moving Average (EMA) for intraday trading. The strategy is demonstrated with examples on 5-minute timeframe charts, emphasizing entry and exit points, and the importance of trading above or below the pivot point to determine bullish or bearish trends.

Takeaways

• 📈 The video discusses a trading strategy for Nifty and Bank Nifty options, which can also be applied to other indices and stocks.
• 📊 The first indicator used in the strategy is the traditional pivot point, which helps determine resistance and support levels for price movements.
• 🔍 Pivot points are technical indicators that can act as turning points and are commonly used by day traders and swing or positional traders.
• 🔢 There are various methods to calculate pivot points, including Fibonacci, Vooodi, Pivot Point Classic, Camara, and DM, each with its own method.
• 📉 The video explains how to use the pivot point indicator in conjunction with the volume-weighted average price (VWAP) and the exponential moving average (EMA) for trading decisions.
• 📊 VWAP is a technical analysis indicator that resets at the start of every new trading session and is based on the volume and prices throughout the day.
• 📈 The EMA, with a length of 20, is used to identify trends and is part of the strategy for determining entry and exit points for trades.
• 📍 If the price is above the pivot point (P level), it indicates a bullish trend, suggesting a potential long trade opportunity.
• 📉 Conversely, if the price is below the pivot point, it indicates a bearish trend, suggesting a potential short trade opportunity.
• 🚫 The video advises against entering trades on big candles as they can lead to larger stop-losses and recommends waiting for smaller candles for better entry points.
• 📝 The strategy is demonstrated with examples from the Bank Nifty chart, emphasizing the importance of the 5-minute time frame for intraday trading.

Q & A

What is the main topic of the video script?

The main topic of the video script is a trading strategy using the pivot point indicator for trading Nifty and Bank Nifty options, which can also be applied to other indices and stocks.

What is a pivot point in trading?

A pivot point in trading is a technical indicator used to determine the levels at which the price may face resistance and support, which can also act as turning points.

Why is the pivot point indicator important for traders?

The pivot point indicator is important for traders as it helps identify key levels where the price may react, making it useful for both day traders and swing or positional traders depending on the time frame.

What are the different types of pivot points mentioned in the script?

The script mentions traditional pivot points, Fibonacci, Voodi, Pivot Point Classic, Camara, and DM, each with its own calculation method.

What is the role of Volume Weighted Average Price (VWAP) in the trading strategy discussed?

VWAP is a technical analysis indicator used on intraday charts that resets at the start of every new trading session, representing the average price a security has traded at throughout the day based on volume and prices, which helps in determining intraday price trends.

What is the significance of the exponential moving average (EMA) in the strategy?

The exponential moving average (EMA) is used in the strategy as a trend-following indicator that smooths out price data and helps identify the direction of the trend, with a length of 20 used in the script.

How does the script suggest using the pivot point indicator for entering trades?

The script suggests entering long trades when the price is above the pivot point and short trades when the price is below the pivot point, considering additional indicators like EMA and VWAP for confirmation.

What time frame is recommended for using the strategy in the script?

The script recommends using a 5-minute time frame for intraday trading, although it also mentions that a 3-minute time frame can be used for faster trades.

How should traders set up the pivot point indicator in their trading platform according to the script?

Traders should set up the pivot point indicator with the type as 'traditional', select 'daily' for the pivot time frame, and adjust other settings such as line width and label position according to their preference.

What is the entry point for a short trade according to the script?

The entry point for a short trade is suggested to be when the price breaks the low of a red candle, which should close below both the VWAP and the 20 EMA.

How should traders determine their stop loss for trades based on the script?

Traders should set their stop loss at the high of the red candle for short trades or consider the pivot point as a reference for placing stop loss, ensuring it's above the entry point for long trades.

Outlines

00:00

📈 Introduction to Trading Strategy with Pivot Points

In the first paragraph, Chitra introduces a trading strategy for Nifty and Bank Nifty options, which can also be applied to other indices and stocks. The focus is on the use of the Pivot Point indicator to identify resistance and support levels in the market. The Pivot Point is a technical indicator that helps traders determine price levels that may act as resistance or support, and can also indicate potential turning points in the market. Chitra explains the importance of understanding how the Pivot Point works and its role in both day trading and swing or positional trading. The paragraph also mentions different types of Pivot Points, such as Fibonacci, Voodi, Pivot Point Classic, Camara, and DM, each with its own calculation method. The strategy involves using the traditional Pivot Point along with the Volume Weighted Average Price (VWAP) and the Exponential Moving Average (EMA) for entry into trades.

05:01

📊 Utilizing EMA and VWAP for Intraday Trading

The second paragraph delves deeper into the strategy, explaining the use of the 20-day Exponential Moving Average (EMA) and the Volume Weighted Average Price (VWAP) in conjunction with the Pivot Point. Chitra describes how to set up these indicators on a trading platform, including the specific settings for the EMA and VWAP. The paragraph emphasizes the importance of the VWAP in intraday trading as it represents the average price a security has traded at throughout the day, based on volume and price. It also discusses the significance of the EMA in identifying trends and how these indicators can be used to find entry points for long trades when the price is above the Pivot Point, the 20 EMA, and the VWAP. The strategy is tailored for intraday trading using a 5-minute time frame, although a 3-minute time frame is also mentioned as a viable option.

10:03

📉 Applying the Strategy to Bank Nifty with Entry and Exit Points

In the third paragraph, Chitra provides practical examples of applying the trading strategy to the Bank Nifty spot chart, focusing on intraday trading with a 5-minute time frame. The paragraph illustrates how to identify bullish and bearish trends based on whether the price is trading above or below the Pivot Point. It explains the importance of waiting for a small candlestick pattern before entering a trade to set a stop loss at the high of a red candlestick for a short trade. The paragraph also demonstrates how to identify entry points for short trades, using the low of a red candlestick as the entry point, and how to set stop losses and potential profit-taking levels at the next support levels. Chitra concludes by emphasizing the importance of booking profits at achieved resistance levels and encourages viewers to like, share, and subscribe for more video content.

Keywords

💡Pivot Point

Pivot Point is a technical indicator used in trading to determine potential support and resistance levels where the price of a financial instrument might react or reverse. In the video, it is the central element of the trading strategy, helping to identify entry and exit points for trades. The script explains that if the price is above the Pivot Point (P level), the index or stock is considered bullish, indicating a potential long trade opportunity.

💡Support and Resistance

Support and resistance are terms used to describe price levels at which an asset's price tends to stop falling and start rising (support) or stop rising and start falling (resistance). In the context of the video, these levels are identified using the Pivot Point indicator, aiding traders in making decisions about when to enter or exit trades based on historical price patterns.

💡EMA (Exponential Moving Average)

EMA stands for Exponential Moving Average, which is a type of moving average that places a greater weight and significance on the most recent data points. In the video, a 20-period EMA is used as one of the indicators to confirm the trend direction and to identify potential entry points for trades. If the price is above the 20 EMA, it is often interpreted as a bullish signal.

💡VWAP (Volume Weighted Average Price)

VWAP is a technical analysis indicator that calculates the average price a security has traded at throughout the day, weighted by volume. It is used in the video's trading strategy to determine intraday trends. The script mentions that if the price is above the VWAP, it can be a signal for a long trade opportunity, as it suggests buying pressure.

💡Intraday Trading

Intraday trading refers to the practice of buying and selling financial instruments within the same trading day. The video's strategy is specifically tailored for intraday trading, using a 5-minute time frame to capture short-term market movements. This approach requires traders to be vigilant and act quickly based on the indicators' signals.

💡Nifty and Bank Nifty

Nifty and Bank Nifty are stock market indices in India representing a basket of stocks from the National Stock Exchange. The video discusses a trading strategy that can be applied to these indices, specifically using options trading. The script uses these terms to illustrate the application of the strategy in the context of Indian financial markets.

💡Sensex

Sensex, officially known as the S&P BSE Sensex, is a value-weighted index of 30 Indian companies listed on the Bombay Stock Exchange. The video mentions that the trading strategy can also be applied to the Sensex, indicating its versatility across different stock market indices.

💡F Nifty

F Nifty refers to the Nifty futures, which are financial contracts that derive their value from the performance of the Nifty index. The script suggests that the trading strategy can be used for F Nifty options, extending the strategy's applicability to derivative markets.

💡Day Traders

Day traders are individuals who buy and sell financial instruments within the same day to profit from short-term price fluctuations. The video mentions that pivot point analysis is commonly used by day traders, emphasizing the strategy's relevance for this group of traders.

💡Positional Traders

Positional traders are those who hold positions in financial instruments for a longer period, typically days, weeks, or even months. The script notes that pivot point analysis can also be used by positional traders, depending on the time frame, indicating the strategy's adaptability to different trading styles.

💡Stop Loss

A stop loss is an order placed with a broker to sell a security when it reaches a certain price. It is designed to limit an investor's loss on a position. In the video, the stop loss is set at the high of a red candle or the Pivot Point level, providing a clear exit strategy for trades to manage risk.

Highlights

Introduction to a trading strategy for Nifty and Bank Nifty options, applicable to other indices and stocks as well.

Explanation of the Pivot Point indicator, its significance in determining resistance and support levels in trading.

Pivot Point as a technical indicator that helps identify potential turning points in price movement.

Different types of Pivot Points including Traditional, Fibonacci, Voodoo, Pivot Point, Classic Camara, and DM, each with unique calculation methods.

Combination of Pivot Point with VWAP (Volume Weighted Average Price) and EMA (Exponential Moving Average) for trade entry.

VWAP as an intraday technical analysis indicator that resets at the start of every new trading session.

Importance of VWAP in determining intraday price trends and its use by retail and professional traders.

Setting up the 5-minute time frame for intraday trading with the Pivot Point indicator.

Selection of the traditional Pivot Point type and the daily pivot time frame for intraday analysis.

Use of the 20 EMA as part of the trading strategy to identify long trade opportunities.

VWAP settings in the trading strategy, focusing on the importance of the band multiplier.

Criteria for entering long trades when price is above the Pivot Point, 20 EMA, and VWAP.

Examples of using the strategy in Bank Nifty spot charts with a 5-minute time frame.

Guidance on not entering trades on big candles due to the risk of stop loss being the high of the candle.

Entry and stop loss strategies for short trades, using the high of a red candle as the stop loss.

Identification of entry points and stop losses in relation to the Pivot Point and VWAP levels.

Demonstration of profit booking after achieving resistance levels like R1 and R2 in the strategy.

Encouragement to like, share, subscribe, and click the Bell icon for upcoming video notifications.

Transcripts

hi friends chitra here welcome to my

YouTube channel today we are going to

learn one of the strategy that we can

use for trading Nifty and Bank Nifty

options okay you can use for other index

also that is you can use for sensex and

uh F Nifty options also you can use this

strategy you can use for stocks also all

right so before uh know knowing the

strategy I need to uh explain you how

this uh indicator will work okay so the

first indicator I'm going to use in this

uh strategy is the traditional pivote

okay using the Pivot Point okay so what

is this pivote point and how this is

helpful in our trading we need to know

that okay so pivote Point standard is a

technical indicator that is used to

determine the levels at which the price

May face this resistance and the support

okay so nothing but the resistance and

the support all right so here we can see

this is the pivote level that is the P

level and the resistance okay so why

this pivote point is uh know taking why

the price is taking support at the

pivote level so where we can look for

options buying and option uh know uh

selling how can we use that use that

levels the pivote point indicator

consist of the pivote point that is p

okay and the support level and the

resistance level this is the pivote

point resistance and the support

levels so what are the other

characteristics of the pivote point

pivote point analysis is a technique of

determine the key levels okay that the

price May react to P Point tend to

function as the support or the

resistance and can be turning points too

okay so while using the pivote points we

can easily identify where is the next

support and what is the next resistance

and from where the price can reverse

this technique is commonly used by the

day Traders and also it can be used by

the swing or the positional Traders

depends upon the time frame and we can

change the pivote point accordingly all

right the here are several methods of

identifying the exact points and what

are the other pivote points other than

the traditional they are the Fibonacci

vooodi Pivot Point Classic Camara and DM

and each time has its own calculation

method so in this strategy I'm going to

show you how can we enter into the trade

using the traditional pivote also with

the vwap and one more indicator that is

the exponential moving average all right

so we can see what is the next indicator

we are going to use in our strategy that

is called the vwap okay that is volume

weighted average price so what do you

mean by vwap it is a technical analysis

indicator used on intraday charts that

resets at the start of every new trading

session all right and it is the average

price a security has traded at

throughout the day based on what based

on the volume and the prices okay that's

why VAP is very important and we have to

use that in our intraday trading

strategy all right and weap represents a

view of the price action throughout a

single day trading session so that's why

the retailers and the professional

Traders are using the VAP that will help

them to determine the intraday price

trends so we can see the settings of the

indicator that we are going to use for

our strategy so this strategy we can use

for intraday trading that is for Nifty

and Bank Nifty and other index too you

can use for f Nifty sensex also okay so

this is the time frame I'm going to use

that is the 5 minutes time frame you can

use this in 3 minutes also as we are

doing intraday all right the first

indicator we are using here is Pivot

Point that is uh know when you go to the

indicator we can see the pivote point

standard and there you have to select

the type in under the inputs the type is

traditional so we can see the other uh

no pivote points also but we are

selecting the traditional all right

pivot time frame also we can see that

there is daily weekly monthly uh

quarterly and there are so many options

uh for other Traders so as we are doing

intraday trading so as we are doing

intraday trading here we are selecting

the time frame as daily okay so click on

daily and number of pivots back that is

15 that is uh 15 the time uh the number

is default if you want to do back test

you can change this to uh know any

number and you can do the back test okay

show labels and uh show prices so this

is the labels and prices is what this is

a Nifty chart right so the R1 label

price is

24414 so we can see the prices and as

well as the labels so the label position

is left and you can keep it uh right

also if you keep it right and if you

click on okay we can see the label price

is no changing to right so I usually

prefer to keep the label prices in the

left the line width that is this line

width is two so we have to check the

other uh all the pivots and all the

support and resistance so as we are

using the traditional pivote here this

the the P level I have kept in black in

color this is the P level this is black

in color and S1 S2 S3 S4 s so we have

the five support level uh below the

pivote and R uh R1 R2 R3 R4 R5 are the

resistance level that is five resistance

levels above the pivote levels so we

have to check everything under style we

are not changing anything that is labels

and lines is checked next we are going

to click on okay so what are the other

indicators we have used in our strategy

the next indicator is the EMA that is

exponential moving average so under

inputs the length is 20 that is we are

using the 20 moving average the source

is close all right style here we can

choose the color according to our

preference so we are using the uh EMA as

well as the VAP so EMA I have selected

the color green in color all right so we

can uh know change the line width also

according to our preference and click on

open Okay the third indicator is VAP

that is volume weighted average price

okay here uh band multiplier is one so

if you want to check all this band two

and band multiplier 3 this is how it

looks like so we want only the VAP line

so I have unchecked all these lines band

multiplier 2 and multiplier 3 and I have

enabled only multiplier one here also I

have enabled only the VAP we don't want

to check all these lines because know

the chart will look clumsy as we are

using only vwap we can we can uh enable

only the vwap line and I have change the

color here also we can change the color

according to our preference so I have

selected the color blue okay and uh we

don't want to change anything other than

this Okay click on

okay we have now enabled all the

indicators so these are the three

indicators we required for our strategy

that is the traditional pivote daily uh

moving average that is 20 EMA VAP okay

so these are the three indicators we are

going to use okay now what is uh how can

we use this uh traditional pivote okay

so if the price is above that is price

is above this P level here we can see

this P right that is the pivote so if

the price is above the P

level

price price above

pivote is bullish that is uh we can

enter for the long C trade again if the

price okay price is

below below the

pivote is

bearish means uh it's weak the

particular index or the particular stock

is looking uh weak okay so these are the

uh no criteria these are the condition

we have to understand when we are

trading using the pivote it can be any

pivote whether we are using the Camara

pivot or traditional uh or CPR whatever

pivote point you are using this is the

logic okay if the price above the pivote

is bullish and price below the pivote is

bearish okay so here we can see that the

price is trading here we can see that

this is the pivote level that is

24,34 is the P level pivote point so

here the price is you know uh little far

from the pivote point but still the the

uh uh particular index is bullish

looking bullish because it's trading

above the P level all right okay so in

case we here we can see that the price

open little Gap up and after that uh we

can see that we got a breakdown that is

a red candle um we got a breakdown below

the P level so it was looking bearish

okay so this is how we have to use the

uh pivote Point okay so now why we are

using the 20 EMA and V appap we can see

that if the price is trading above the

pivote level we understood that the

particular index is looking bullish okay

but after that the price is already

above the 20 EMA and VAP in that case

you can look for a long trade

opportunities so above this uh know

Green candle you can look for a long

trade for the next Target I can say the

next Target if here we can see is R1

okay so we can book our profits at R1

and that is the resistance level so once

uh the particular level got achieved we

have to book our profits all right so we

are not looking for a short trade

opportunities here because uh we'll be

looking for long trade only if the price

is above vwap 20 MAA and above the P

level okay so again we got a know pull

back uh to the 20 MAA and above the VAP

in this small green candle we got one

more entry okay here we are not entering

because the price is below the VAP here

we got know one long trade opportunity

this small green CLE that is 1045 candle

we are entering into the long trade for

the target of R1 and R2 that also got

achieved now we can see few examples

from the bank Nifty this is a bank Nifty

spot chart okay so as we are doing

intraday this strategies for intraday

the time frame I have selected is 5

minutes you can select even 3 minutes

because 3 minutes also will give good

trades but I use usually prefer 5

minutes time frame okay so uh we already

know that if the price PR is trading

below the P level means the trend is

bearish and if the price is trading

above the P level means the trend is

bullish okay so the first 915 candle on

24th July opened in between p and S1

okay so we are waiting for the price uh

either to touch from P level or to know

or green candle stay above the P level

in order to enter into the long trade

okay so here we can see that the green

candle gave a close above the 20 M and

VAP we will not enter into the long

trade because here we can see that we'll

get a rejection from the pivote point

okay so again we can see that this

candle also but above the P level there

is no green candle so we are not going

to enter into the long trade so we got a

uh no here this uh no this candle that

is 935 candle is a red candle so this

gave the confirmation for us to enter

into the short trade so usually we

should not enter into the short trade or

long trade if you are getting any no big

candle because our SL will be the high

of this uh red candle so you should not

enter into this types of candle always

wait for the price to give a small

candle so here this is a perfect red

candle to enter into the short trade

okay so once you enter into the short

trade here this is the stop loss

okay so this is the stoploss that is

high of this red candle we can keep it

as stoploss okay so where will where

will be your entry point your entry

point will be the low of the once this

low of this red cand is taken away we

can enter into the short trade so this

is the

entry so this is the entry now click on

okay okay so this is the entry point so

this is the stoploss or we can keep the

P level as the P point that is the

pivote is near to the particular red

candle and also this red candle gave a

close below the vwap and 20 Em you can

see that okay so once you enter into the

trade if you got no good uh points after

that in the premium you can always book

your profits so from here 51889 the next

support we can see is 51231 and price

touched to that particular level and

price was continuously falling down and

below 20 EMA

okay hope this video is useful to you

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for watching