Short Term Trading Strategy For Indices (Also Forex!) - By Vladimir Ribakov

Hello traders, how are you? Vladimir here from Traders Academy Club, and in this video I would like to share with you a very powerful trading strategy, uh, to trade indices. It could be the S&P, NASDAQ, DAX, the FTSE, whatever the index you love to trade, this strategy is suitable. This strategy is amazing, um, exactly for that. But a spoiler for this video, this strategy can also work with Forex. The reason I presented on indices is because they tend to be very technical in multi-timeframe read. That's why this strategy will be presented on indices. Okay, again, it could work on Forex, it could work on commodities, any good technical market. But before we go to the charts, if you are new to this channel, welcome to our amazing community. Please subscribe with the subscribe button below this video. So let's begin then, and let's go to the charts, and I will present in this video on the S&P and the FTSE, the UK index, um, examples. Again, it could work on any other index, and what I'll be using is the MACD indicator. Okay, so before I go and explain all the technical conditions and the steps of the strategy, I would like to take a moment and to thank ActiveTrades broker for making this video possible. And also, I would like to invite you to join our dedicated trading group I have together with ActiveTrades. Uh, join with the link below this video in the description. Join ActiveTrades, get access to our group, and enjoy the amazing trading opportunities and education we discussed there. So let's talk about the strategy now. The indicator I will present here would be the MACD indicator. If you do not have one, below my video in the description you can find the links to download this indicator and many other indicators including the KTLI This very indicator you can see on my chart, Key Trading Levels indicator based on volume profile. You can download my virtual trading pen here and many, many more trading tools. Many of these trading tools and trading solutions are available also in free version, so follow the links below this video, download, install, enjoy. So the first condition I want to do here, I will be presenting with the 4-hour chart and 15-minute trading. As I said, this is a short-term trading strategy. You can work with daily and 1-hour, you can work with 1-hour and 5-minute combinations, but what I want is higher time frame basically for trend definition, or I would— I should say trend and momentum definition, uh, and the lower time frame For the trading. So the first thing is the split of the trending momentum. What I am looking at is right here. Let me go to the virtual pen to draw with the conditions where the both moving averages of the MACD, okay, are crossing. Down below this zero line. As you can see, there is a zero line right here. When both moving averages cross down, this is the place where for me the momentum is bearish, right here. Okay, and as long as the both moving average did not cross upside, I consider this zone as a zone of trading opportunities to the downside. Now, as you can see, I chose not the classical market conditions. Like, you know, it's, it's super easy to choose a very trending market and see, like, you see, you do 1, 2, 3, and it works. But the thing is, the market is not always, uh, super trending. That's why I chose the more tricky conditions. So because I want you to see it working, it works The strategy, right, works in tricky markets, so you understand how it works also in clean markets, okay? Very trending markets. So this would be the definition of a bearish momentum for me in this strategy. And the bullish momentum is the opposite, right here when both moving averages of the MACD cross up, okay? This is a sign that I start to look for bullish Opportunities all the way until they will cross down again. Okay, so that's what I would be showing you here. So let's start with this bearish momentum right here from the first line until the second line. The next step I go is to the 15 minutes. Okay, this is the first line, the second line. Sorry, this is the first line. Starting from the first line, from the cross. I will be looking for sells, right? And as I showed you, this is a tricky market condition. The trend is not clear here. And, um, the next step for us would be to find a bearish divergence. Why? Because we are looking to sell. Now, before the term divergence starts to scare you, I would want to give you a very brief explanation, uh, how it all works. So a bearish trending condition would be the following, okay? The market goes up by making higher highs, higher lows, and you will want to compare higher highs on the market versus lower highs On the indicator, I will be using the MACD indicator. More specifically, the moving averages of the MACD indicator. Okay, so I will want to see on the chart higher highs and on the moving average of the MACD lower highs. Okay, and for bullish divergence, it would be the opposite. The market will make Lower highs, lower lows, and the indicator would give me higher lows. This is a brief explanation of the divergence, the basic divergence, negative and positive divergences. Negative is bearish, positive is bullish. But if you would like to take your education, to take your knowledge to a very different level, all about the divergences and the trading techniques, um, relying on divergences, I welcome you to join us in our trading family, Traders Academy Club, and enjoy all the best trading education and proven trading systems and strategies I have based on multi-timeframe divergence. Join us in our trading family with the link below this video. And now let's go back to here. So we are after sells after the first cross, which means I will be looking the, the chart, the price to make higher highs and the indicator to make lower highs. Right, to create a divergence against me on the moving averages. So when I will be able to spot that, that would be our strategy plan, which I will explain. So here is the divergence— the market making higher highs, higher lows, right? This is the higher highs, and this is the place where the moving averages create lower highs. Okay, let me increase the MACD for you a little bit so you can see that better. Higher highs on the chart, lower highs on the MAs. Okay, uh, so this is just one example and I will show you more. Oops, this is another example. Okay, and this would be another example between the next 2 highs. So higher highs on the chart versus lower highs on the indicator, higher highs on the chart versus lower highs on the indicator. What we will want to do next is to measure our probability and risk-reward ratio in the trade. So what I want to do is to go to the price Connect the highs of the divergence and create a parallel line with the low in between the highs of the divergence. Okay, then what I want to do next is to create another parallel line on a duplicated distance. So if that's my first distance between the first 2 lines, I want duplicated to the direction of the divergence. So if this is a bearish divergence and I expect the move down, because on the 4-hour chart, remember, we are looking to trade down with the cross, so I want to duplicate to the downside. Okay, and when it will be to the upside, it will be the opposite. So what I will do is connect the lows of the price, parallel line on the high In between the lows of the divergence and duplicate the distance to the upside because I am looking to trade upside. So what happens here is look at the conditions the market give us. So we have the higher highs on the chart. It's it stands here for. Sort of double top here, as you can see, okay, with this divergence. Not really classical higher highs. And what we do is we put a parallel line on the bottom, okay, and duplication. I will explain in a moment why I want the duplication, okay. So what I want is duplicate to the downside, okay. So that's about 288. Yeah, pretty much accurate like this. So the reason I will, I will work with 2 lines and not one is due to the risk reward. There will be times that you would want to enter a trade, and I will show the enter. The entry would be right here when the divergence completes and the moving average managed to cross. Okay, so as soon as that happened right here, this is an opportunity for a trade. The problem is that if I enter right here when the conditions complete and I protect above the most recent high— and I will protect above the most recent high What will happen if I aim as a target to the first line? I would never get a good risk-reward. A good risk-reward is anything which is positive for you. For example, if you are risking 300 points, anything above 300 points is a good risk-reward for you. Why? Due to the risk management principles, which I'll explain in a moment. So what you will want is the duplicated line. Okay, right to the bottom. So if you are risking in that case about 200 points to the bottom of the first line, it's less than 200 points to the next line, it's close to 400, which makes it almost double. So in that case, you almost would reach the profit. However, with this spike, this trade would lose. Okay, and it's absolutely fine. And again, I, I have no, uh, wish to show you only profits here because it would be absolute lie. There will be losses as well. And the reason I show you here both is very simple— management. You would see how with keeping the risk-reward in your favor, you will make money with this strategy. Let's go to the next one. Remember, we are still after sells due to the 4-hour chart analysis. This is the next place. By the way, if you wonder how I duplicate my line, so I double-click on the first line I draw, okay, and I just hold the Ctrl button. Look what happens here. I double it. You see it's marked here with these spots. I hold— I press the Ctrl on my keyboard, and from the middle, while I hold the Ctrl, I just grab it to the place I want. Again, picking it and grabbing it. Okay, so the idea here is again very simple. I take the highs, I put the line on the bottom, the low between the highs, and I go with the duplication, uh, and If— remember, I want the cross. Here is the moving average cross. Okay, this is our second line, don't forget. This is a moving average cross. So if from this entry I protect upside, that's about 130 points. To the first line, it's about 160 points, which is already positive risk-reward, right? But to the second makes it like 3 times more. Which makes the risk-reward much more significant, uh, in, in, uh, in your favor. So the next one would be here, and remember, we are still after the sells. So the first line is here, the duplication is about here. This is where the moving— sorry, here. This is where the moving average crossed to the downside. As you can see, from this moment I cannot get any good risk reward to none of the lines. So for the sell, I had one loss and one profit. And as I said, risk reward is your key here. And let me present you what I mean by that. Okay, take a look. If we go on a simple mathematics, and for every— let's say our stop loss would be 1%. Okay, and take profit, let's say on average would be 1.2% because we keep positive risk reward. Of course it could be much more if you make sure the risk reward to one of the lines is more positive than 1:1, but let's say just for the very simple numbers, 1:2 with 50% success rate only. You Lose 1, you profit 1.2. You lose 1, you profit 1.2. You lose 1, you profit 1.2. You lose 1, you profit 1.2. So with that only, you are 0.8% profit. If this is going to be not 1.2— and remember, it's all in your hands to decide The minimum risk-reward you get in the channel. If it gives you less than 1.5, skip the trades. If it gives you 1 to 2, for example, take the trades. Let's say your take profit is 2%. What happens in that case— okay, let's just erase that. What happens in that case, for every 1 you lose, you profit 2. Okay. And then you need only 2 trades to cover 4 losses. And the next trade would give you already +2% in profit. That's why you want to make sure that distance of this channel you create is working in your favor. So I'll show you the bearish examples. Let's see bullish examples after this line. Remember, this was the first line. We can remove that, we don't need it right now. Now, as the moving averages of the four-hour chart crossed upside, we are after buys. So I go back to the fifteen minutes, and from this moment of the line, we are looking for bullish divergences. Quick reminder: lower lows on the chart, higher lows on the moving average of the MACD. The first place where we got that—let's increase that a little bit—as you can see was. Nothing here, was only here. So this is the first place where we got this double bottom and bullish divergence. Okay, so what we do is the same logic. We create Duplication. Okay, one is between the lows to the high and then duplication. That's it. So you are waiting for the moving average to cross, which happens right here. At that point, you are asking yourself, okay, so if I'm risking 130 points to the top of this channel, I already have At least 1 to 2, or anything positive in your favor. Okay, in that case, this trade would pay for the first target, and you don't need to aim for more here because you already have a good one. And for the big one, it would not work out because the market reversed to the downside. Okay, so this was your first trade. Then you got another moving average divergence, which was Here, okay, creating the channel and duplication. You can see it would kick the stop loss because after the moving average crossed, the price went down. So this trade would lose. The next divergence though, here Okay, the big divergence between— you can see here, right? So this would be the first, this would be the second target. The next divergence, by the time it crossed the moving averages, right, it happens right here. Okay, you can see that the first line does not have any good risk reward. We are risking about 270 points, and to the upside it does have more than 270. Okay, so this would be a good target zone for you. So this trade would profit, and you would lose one, and this time you would profit more than one because the take profit ratio is bigger. Now, same, the next one would happen to be here, the moving average divergence on this double bottom. Okay, you make duplication, moving average cross here, you would not be able to get any good risk reward to none of the targets. So we are waiting for better opportunities. Remember, do not force. The most important thing to do is not to force. Let's wait for the next divergence in play. I'm not sure about that. Let's see. No, that's not divergence. Nope, that's it. There were no more opportunities. Besides that. Okay, so that's basically how you spot it to the upside, uh, for bullish opportunities based on a 4-hour chart momentum. How you look on the channel on the 15 minutes with the bullish divergence, uh, and when the momentum is to the downside on the 4-hour chart, you are looking on the 15 minutes for sales. And again, as I said, you can find that on any of the indices. In that case, you can see that the UK example here— okay, I'll show you both. This is the place where it crossed down. This is the place where it crossed up. And what you will be looking after the first line For sells, the first line. Okay, so we want bearish divergence. The price is going down. No bearish divergence here. Here is the first bearish divergence we have in play. Here we are. Not sure about the risk reward we can get here because the— once the moving average crossed The protection here would be more than the target, so we cannot use this one. The next divergence for us would be here. Remember, we are after sells based on the 4-hour chart. Okay, duplication when the moving average cross happens to be here. Protection about 470 points. First target is less than 470, not good. Next target is double the point, and this one would pay and pay greatly for you. Remember, it's never about making only winners. It's about trading as low as 50% success rate with positive risk-reward ratio. That's what trading is about. And after the second line, we are after buys, as we saw before. Uh, so let's see where we got the bullish divergence. So this would be your bullish divergence right here. Okay, you create the duplication of the line and then the duplication of the range. Okay, so this is where the moving average would cross Upside clearly. You ask yourself, okay, protection here about 200 points to the upside. It's already double. You don't even need to aim to the next one. Okay, this one would pay. Next bullish divergence happens to be— let's remove that— happens to be here. No, sorry, there is one before. Right here. Yep. Okay, the, the lows, high in between the lows, and duplication. Moving average cross upside here. You can see that about 390 is the stop. We can't get good risk reward. That's why this one would never turn to be a good trade. We skip that. Next one turns to be here, connecting the lows. Bullish divergence on the moving average. Lower lows on the chart, higher lows on the moving average of the MACD. First, second moving average cross right here. Protection about 210. Versus target of 400 plus. Okay, uh, I can keep going and going and going, but remember, it all now starts to be the same. We are looking for bullish divergences. Um, I'm not sure we got anything else. Nope, there is one more here at this point. The high in between and duplication. So when the moving average cross happens to be here, you can see we cannot get a good risk-reward. So this would not be a valid trade. So that's pretty much it for this video. I hope you find it useful and helpful, and I hope you understand the huge potential this one has for you. And I would like to thank you for your time watching this video. Uh, don't hesitate to ask any questions if you have any with the, with the comment section below. 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