Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
The CD you see in that post was very likely to do with some data collection and perhaps some analysis. It was nearly a year ago now, so I can't recall what I was doing with it!
However, CD certainly has its use. If beginning to trade VWAP, a look into the underlying structure of the market could be helpful. Therefore, if you are going to incorporate CD in some form I would advise using an indicator that measures the momentum of the cumulative delta vs. the cumulative delta itself. If you are a lifetime NT8 user there is a great indicator that does this called irDeltaMomentumV2 - you can get it via the NT website via the link below.
It can help clue you in to the underlying structure of the market gauging how much delta momentum there was behind each move and helping to spot divergence. The only reason I didn't include the suggestion of using CD in some form when trading VWAP is because it can give you false positives against valid VWAP trades. This causes indecision and a reason not to take a trade. Adding another layer into the decision making process is something to be avoided.
Personally, I don't think it is necessary to have CD on your chart. VWAP and Price Action has everything you need to discern an entry, or not. VWAP trading literally tells you if you are in oscillating chop / range or in a trend. And therefore you don't need CD for that.
I marked up some obvious divergences in the chart to show what this indicator can do.
--------------------------------------------------------
- Trade what you see. Invest in what you believe -
--------------------------------------------------------
Thank you for the superlative explanation of the VWAP. I am new to this forum and
am very impressed with the information and knowledge of the posters. Additionally, I am somewhat overwhelmed, in a good way, with the civility of the members. It is a great pleasure to see a group of people with a common interest discussing and imparting a very high level of knowledge
regarding a very difficult subject in such a courteous and respectful manner. I look forward to learning very much here and hope that I will be able to contribute something occasionally.
Stay well and happy trading to everyone.
No problem. It all comes under the umbrella of VWAP.
The data series of choice IMO is critical to trading VWAP. It took me a long, long time to design a data series that suited what I wanted to see. By definition I wanted to see obvious closes within the VWAP envelopes. Time based data series didn't allow me to do that and/or was wasn't as well defined.
The following 2 chart examples are for the same day. One is a 5 minute chart and one is my data series (well the first few hours anyway) which is based on tick. I have marked the VWAP test on both charts. The 5 min chart VWAP TEST SHORT is not as clear and obvious. I like to see definitive bar closes within the envelope(s), but as you say sometimes on a time based chart, the VWAP setup is over in a shorter time than the bar takes to close, therefore its definition is gone. I hope that makes sense.
Again, this is my opinion and it doesn't mean anybody is wrong, but I guess it comes down to preference.
--------------------------------------------------------
- Trade what you see. Invest in what you believe -
--------------------------------------------------------
This is by far the most respectful and knowledgeable trading forum out there. There is no room for ego's. Threads can get a little heated sometimes but this is down to a passion for trading more than anything else!
--------------------------------------------------------
- Trade what you see. Invest in what you believe -
--------------------------------------------------------
I can’t thank you enough for sharing this. I just pulled up the charts of a couple stocks I traded on Friday and was amazed to see just how effective the setups you’ve shared truly are. I will definitely be adding these tools to my arsenal. If you don’t mind, I’d like to tag you in my journal posts as I further explore these concepts and see if they work for me as a trader! Thanks Johnny!
--------------------------------------------------------
- Trade what you see. Invest in what you believe -
--------------------------------------------------------
Thank you @JonnyBoy, its very rare to see someone post their experience like this. I think this is the best feature of this forum.
I've one question though, I've read entire thread and it didn't really come up, but there is something little distant related to VWAP, its TWAP.
Some people use it in Cash Index (or simply anything that doesn't have volume data), I've also used TWAP+/- 1SD with fib divisions. It was interesting concept for mean reversion trades until you didn't hit the trend. Your VWAP guide has kind of spurred me back into looking at it again as option.
Have you tried it? If yes, would you consider it worth?
I'm taking this round about way because I actually can't use VWAP due to volume being not there and here options are only available on Cash underlying and not future so I have to track cash only.
I have not really looked into TWAP so I am not that familiar. I can certainly see using time instead of volume to execute (or even benchmark) against makes a lot of sense. I'll have to dig into it a bit more first. For non liquid markets I would imagine TWAP has some potential.
--------------------------------------------------------
- Trade what you see. Invest in what you believe -
--------------------------------------------------------
Here is what I'm talking about, there are probably better ways to handle this tbh web
Now that you have listed down how to trade VWAP, I need to write down all that and see this in new light as well. You were absolutely right in saying that you have probably the most straightforward VWAP guide out there.
/I hope I'm not going too much out of topic here. Thank you again ^^
VWAP Trading | April 20, 2020 | ES | Update on Targets
It was a challenge to pick out the VWAP trades today, but there were certainly some good setups.
One thing I need to note is that the T1, T2 and T3 profit targets should be moved to their respective price (around the standard deviation band) on the bar you made the entry on. To put another way, line up your profit targets at the standard deviation envelope lines / price at the time of entry, or you will be forever chasing them as they expand.
I have marked up the chart with triangles to show you what I mean.
--------------------------------------------------------
- Trade what you see. Invest in what you believe -
--------------------------------------------------------
