The 5-Step Trade Setup I Use Daily
60sClear, step-by-step trading strategy that viewers can easily follow and save.
▶ Play ClipAI Summary
This video outlines a precise intraday trading strategy that the presenter waits for every day. It details a five-step sequence for entering a long position after a stock's low, using VWAP and the 9 EMA as key indicators, with a defined risk-reward structure.
Chapters
[00:02]
The Setup: Stock Turns Off the Low
The strategy begins when a stock sells off, puts in a low, and stops going down. This is the starting condition for the trade.
[00:17]
Momentum Builds Back Towards VWAP
After the low, price should grind back up toward VWAP (Volume Weighted Average Price), which is described as the day's center of gravity. This move indicates momentum rebuilding.
[00:32]
The Trigger: 9 EMA Crosses VWAP
The entry signal is when the 9 EMA (a fast, short-term moving average) turns up and crosses through VWAP. This is the confirmation moment.
[01:08]
Entry at the Cross
Enter the trade immediately at the cross. Do not wait for the candle to close or for additional bars for confirmation.
[01:24]
Stop and Target from the Measured Move
Measure the distance from the low of the day to the cross. This distance is one unit. The target is one full unit above the cross, and the stop is a third of the way back down toward the low.
[01:40]
The Risk-Reward Ratio
Because entry is near VWAP, the distance from the cross to the low is roughly the same as from VWAP to the low. This creates a risk of one-third of a unit for a potential gain of one full unit, resulting in approximately a 3:1 risk-reward ratio.
The strategy is a clear, rule-based intraday long entry based on a VWAP and 9 EMA cross, with a defined 3:1 risk-reward structure. It emphasizes immediate execution on the signal without waiting for additional confirmation.
Tutorial Checklist
5
01:24
Set stop and target: measure distance from low to cross (one unit); target is one unit above cross, stop is one-third of that distance below entry.
Study Flashcards (5)
What is VWAP?
easy
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What is VWAP?
easy
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Volume Weighted Average Price – the average price everyone paid for the stock today, weighted by volume traded.
00:17
What is the entry trigger in this strategy?
easy
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What is the entry trigger in this strategy?
easy
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The 9 EMA crosses above VWAP.
00:32
When should you enter the trade?
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When should you enter the trade?
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Immediately at the cross, without waiting for the candle to close.
01:08
How do you set the target and stop?
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How do you set the target and stop?
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Measure the distance from the low to the cross (one unit). Target is one unit above the cross; stop is one-third of that distance back down.
01:24
What is the approximate risk-reward ratio of this trade?
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What is the approximate risk-reward ratio of this trade?
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Roughly 3:1 – risking one-third of a unit for a potential gain of one full unit.
01:40
💡 Key Takeaways
🔧
The 9 EMA Cross as Trigger
Defines a clear, objective entry signal that removes guesswork.
00:32
⚖️
Immediate Execution
Emphasizes acting on the signal without waiting for extra confirmation, which is key for momentum trades.
01:08
💡
3:1 Risk-Reward
Explains the mathematical basis for a favorable risk-reward ratio, making the strategy attractive.
01:40Full Transcript
[00:02] almost every day. Just five things in order. First, stock turns off the low of the day. It sells off, puts in a low, stops going down. That's the starting Second, momentum builds back towards VWAP.
[00:17] Quick definition if you're newer, VWAP is the volume weighted average price. Basically, the average price everybody's paid for the stock today weighted by where the volume actually traded. Think of it as the day's center of gravity.
[00:32] So, after the low, I want to see price grind its way back up toward that line. That move back is the momentum rebuilding in real time right in front Third, and this is the trigger. The 9 EMA crosses VWAP. The 9 EMA is
[00:51] just a fast short-term moving average. It tends to hug price. It reacts quick. So, when that line turns up and crosses through VWAP, that is the entry signal. That's the moment. Fourth, you enter right there at the cross. You don't wait
[01:08] for the candle to close. You don't wait for three more bars to close so you feel sure about it. The 9 EMA cross is the confirmation. It happens, you're in. And fifth, your stop and your target come off the measured move. Simple. You
[01:24] measure the distance from the low of the day up to the cross. That distance is your unit. Your target is one full unit above the cross. Your stop is a third of the way back down toward the low. And that's why that
[01:40] math comes out clean. When you enter at the cross, you're entering right around VWAP. So, the distance from the cross down to the low is basically the same as the distance from VWAP down to the low. You're risking a third of that going for
[01:55] You're risking a third of that going for a full one unit. That's where the roughly three to one comes from. You risk one, you're looking for three.
