All right. So um, we're gonna jump in here. It's uh, typically at this time of day, of course I would be doing my regular, uh, morning trading This morning it's particularly slow, so I thought this would be a great opportunity to walk you guys through day trading with Macd. So for those that have never used Macd before, you're probably familiar with at least it's an acronym Macd and it stands for moving average uh, convergence divergence indicator.

So it is a technical indicator and it is a lagging indicator. As I suppose all indicators are, it'll lag behind price action. but I use it in a couple of ways. Um, one of the big ways that I use it right now as I'm day trading is to help me avoid false breakouts, especially during choppy markets.

What? What I find to be helpful is adding that, um, that second or sometimes third indicator just to help me have sort of an additional item to check before I take a trade. When the markets are very choppy, I tend to feel like, okay, I'm I'm getting myself into too many false breakouts. I I start to search for something that can help slow me down. They can help prevent false breakouts, and I imagine that many traders are like this.

So you know the indicators that I use. Typically during a really strong bull market, I wouldn't even have Macdion here. I would just have volume and I would have my candlesticks. But when the market starts getting choppier and I start getting in these false breakouts, that's where I kind of feel like I need a little bit more support.

So it's kind of like you know, bringing a little a first base coach over to give you a little pep talk before you take the trade. Having that extra indicator just for me helps me with context and you know it helps keep me out of false breakouts. So I actually did another episode specifically on false breakouts. Uh, where I talked about the the the three-step checklist Uh, that I'm taking before, uh, before any trade right now.

So I've got this right here. and I'll go over this during today's episode as well. And we may even get some live trading today because it is still regular trading hours and my scanners are running. But it just so happens this morning that we don't have any particularly, um, exciting or big Gappers.

So it may be that I don't take any trades until like 9, 45, or 10 a.m And so I thought this would be a good opportunity to go over Macd. Okay, so you can. Almost any charting platform gives you the ability to turn on Macd and it's a indicator. You can go to your charts and usually insert study and you can type in Macd So Macd right here.

The Macd Moving Average Convergence divergence is a trend following a momentum indicator that shows the relationship between two moving averages. All right. So let's get over on the whiteboard here and talk about this for a second. So we're talking about Macd as you know, Macd moving Average Convergence Divergence indicator, And so when you have a stock that starts, um, moving up quickly like this, if you have multiple moving averages, let's say you've got a 20 moving average here.

and then you've got a 9 moving average here. What you know is that the 9 moves faster than the 20, right? And so in this period here, we're having a divergence right there. These moving averages are moving apart. and so this is the area where your Macd indicator is an oscillator and it's going to start pulling away and showing this divergence.

Now, when we come back into, you know, we go a little higher. and then we come into maybe a period of consolidation or whatever the case is. Then this starts to roll over fast, This starts to come back down, and now we come into a period of convergence. right? So now as they're squeezing back together, this is a period where generally you're going to find a stock is more choppy.

It is more difficult to trade when the Macd is converging, and then this is an oscillating indicator that shows positive and negative as well. So uh, you could read more about this and I'll just give you a couple more pieces of information here. So the the standard settings. Uh, compare the difference between a 26 day and a 12 day exponential moving average.

But of course this is going to be intraday when we're using it on a one minute or a five minute chart. A nine day, nine period Ema moving average is called the signal blind. It's plotted on top of the Macd to show buy and sell opportunities. Okay, so let's look at uh, the one minute chart just for instance here.

So we've got this stock Apdn and uh or Ap sorry I wanted to put on aprn aprn blue apron. So on this stock here you can see how like in this period here the Macd goes negative. it goes below the zero line. The moving averages have not only converged, they have crossed against each other.

Okay, so my general rule of thumb right now in this Bear Market is to focus on trading when the Macd is positive. So I want to be trading during these ascending mountain ranges Here when it's moving up. When it's negative like this, I don't really want to be trading it. and in fact, I really try to hone it in to only be trading during the periods where I can see the green right here.

those are sort of the only spots I want to trade. And then when we get that cross over here. which is, we switch from diverging to converging. Once we start converging, I really don't want to be super aggressively trading a stock.

The times that we're going to see the cleanest momentum and the biggest moves by far will be when the Macd is in a divergent state. So your move, it's moving apart and you're seeing these nice big mountain ranges. So you know an area like this. I mean it's It's easy to see this, but you know, if you saw this right here, this would be a spot where it's like, okay, these moving averages are pulling apart.

This is the place I want to be watching for potential First Pullback Micro Pullback. For those that are tuning in here on Youtube, I'll put a link right down the description to my micro pullback pdf. Um, since this is a live broadcast, I'll probably add it in like 20 minutes, but you guys can come back and you can check it and download it later. The micro pullback is one of the strategies I trade a lot on fast moving stocks and so I want to be trading aggressively when it's moving up.

and then when we start to roll over here, right? this is where I'm going to say, you know what? Okay, the Macd is pulling back. It's rolling over. It's getting right across. This is not the area that I want to be aggressive, so if I don't already have profit, then I shouldn't be taking a trade up here.

Now Does it go higher? Yes. But notice that the moving averages are now converging and as is depicted in this crossover right here. So this is where we now have a Higher, risk of a false breakout. and that's the whole idea for me is to help me avoid getting caught in a false breakout like this, right? Because in the past and and you know, look in a really bullish market you'll have stocks that they just blow through.

This level that you get in at 450 and it goes to 15, 15, 50, 16 and it just keeps going. But in the bearish markets that we've been in, what we see more often are these false breakouts. So this came up to a double top rejection and that could have easily been a big loss as it flushes back down to 14.. Now here it goes higher.

And one of the things I try to be really cautious about is when you have a divergence when one indicator is telling you to be cautious and then the pattern is going higher Because this for me, while on the one hand, you can have irrational markets, you can have shorts that get squeezed out and maybe you could say all right, I could take some trades up here, but this to me wouldn't be an area to be really aggressive. The area to be aggressive was back here at the beginning of the move and look, we have some stocks that will stay with this really positive open Macd for like five dollars a share. As it pulls back and keeps going higher, pulls back and keeps going higher. So this one the fact that it was kind of going negative here.

Yes, it went a little higher, but it was sort of like that final push. And then in this area, you know there are some traders that get into over trading These you know you just keep over trading, over trading and digging the hole. So I want to show you the settings that I'm using here. Uh, standard 12, 26, 9 The standard settings.

I'm using it on the one minute chart because it's Try. I'm using it to try to help me avoid getting caught in false breakouts and I'm trading. Usually my final entry is on the one minute chart. I turned off the histogram uh, I leave on Macd right here and I leave on the signal.

Okay, so remember the signal is the 9. The Macd is the comparison between the 12 and the 26 and then I just changed the way these are highlighted with colors and I you could. I mean other people would do it differently, but you know, the reason I did it like that was because I really and you could do it like this if you wanted. But I really wanted to see and focus on trading it when it's just green.

All right. So that's the area that I really want to try to be most aggressive when it's just green. So however, you need to draw it so you focus in mostly on that area. you know, dry and a lot of platforms give you the ability to customize that.

So the thing for me, um, and I found this to be pretty consistent is that in a bearish market, if I can focus on trading the front side of the move, that's when I'm going to do the best. So I don't want to mess around with the back side as much as I can help it, I want to focus on trading the front side of the move. So what's another stack that we had? Um, let's see Gct. let's look at Gct All right.

So Gct This gave us, um, some action and you know this is A this is actually a good one because yesterday right in this area and I'm going to switch this back to the way I had it before because I kind of do like that better. something like that. So yesterday at the Open a lot of traders were, um, were jumping on this for this trade right here and this was a particularly risky trade. As I looked at it, the Macd not only was this very high, higher priced extended, it was below view app at the Open, the Macd final confirmation it was negative.

it was below zero. The moving averages were going down right. They were actually diverging to the downside. So yes, it did pop back up.

but it wasn't a surprise that that wasn't a sustained move. This was not. uh, still showing that really strong front side momentum if we go back to the previous day here. If you don't even look at the chart pattern, just don't even look at the chart pattern for a second.

You just look at these sort of mountain ranges. Um, as you see them getting bigger and bigger. This is where things get exciting when we have these nice, ascending, growing mountain ranges. This is obviously in a pullback consolidation and then it starts to open up a little bit here and it starts to move higher again.

Right here. right? So now we're coming into a bigger mountain range and it can be helpful both for long and short. Looking for shorts when you start to get that curl that, uh, selling off when you've sort of hit the peak and now it's pulling back down. But it can also just be helpful for timing your your entries and exits.

So I have it. You know, over the years, um, I'll put indicators like this on my chart and then I'll take them off. I bring them back when I feel like I need to lean on something like an indicator just to help me stay out of false breakouts. When the markets are particularly choppy, I will feel like I need to lean on a couple more technical indicators just to keep me focusing on trading the front side and trading the best quality trades.

You know, the best quality setups. When the market is really hot, I may find that I will go a week or two weeks without really referencing this too much and then that's the time where I'll say, you know what, I can remove it, I don't really need it right now and I'll pop it off my chart and then you know, maybe I'll um, bring back a different indicator. uh, during the next. Um, you know, bear market when things get choppy again, you know.

And one of the things that's important is Um. indicators are only good if you use them consistently. If you're using them intermittently, then it's really not going to help you so you want to. If you don't want to add too many, you want to add just enough indicators that you can look at.

You can make it a part of your habit and part of your workflow that you check it before you take a trade. So you know something like this here. This is a spot where you would say does this have a higher likelihood of being a false breakout And I would say in contrast to Apdn, the Macd is starting to diverge pretty quickly. We're coming back to the highs.

We've got these increasing mountain ranges. This was a decrease, but we had an Abcd setup. so through here we're holding support and then that starts to give a stronger bias that this could be a setup that works well, right? And then you do end up getting that nice move higher now in this area should we be watching this to the long side for the move back up and this is a sharp crossover. That was a sharp crossover as a result of a sharp sell-off and that bounce right there.

While you could have traded it, that would have been a very high risk trade, especially for a beginner trader. So I think if beginner traders focus on taking breakouts or buying off of support when we have these positive ranges in the Macd where you're above the signal line, that's where you're going to find that the moves are the cleanest, the moves are the biggest, and where you're going to see the most consistency when you start trading. When you know if you just trade it all the time, then invariably you're going to end up trading some of these periods where this is going to be against you on the position. So and this ended up pulling back so your areas where you basically had the green light as per Macd to trade this.

it's like right in here and then that's not even factoring in like whether or not you liked the chart. It's just these are the areas where Macd said you. You could consider it if you're only trading when the Macd is above the signal line. Okay, so clearly these are areas where you're seeing some of the biggest moves while these could and this did reject here off the top, they're not without risk.

Trading is, of course risky, but these are the places where you're going to see I think some of the most opportunities and I think you're going to find that trades are a little bit more forgiving when you're trading them in these areas. So you know Again, as always, take it with a grain of salt because my results are not typical. This has just been my experience and I'm just trying to share with you. Uh, a tool that that I'm using to help me avoid more than anything false breakouts because you know part of trading and you know this is sort of the reality of it.

A big part of trading is it's not just finding winners. it's learning how to minimize your losers. It's learning how to cut down on those trades where you catch these false breakouts and get a really big flush. So anything I can do to help me cut down on those trades, even if it cuts me out of some winners, as long as it cuts out more of those nasty false breakouts, I'm going to be a happy camper.

And so you know I'm not saying necessarily that I would attribute my hot streak that I'm on right now solely to using Macd, because it's not just because of that. The hot streak that I've been on has been a combination of being willing to be a little bit more conservative, slow down a little bit, and use moving average convergence divergence as just sort of that final check. So it's been, you know, part of my process of trying to trade stocks on the front side of the move, trading stocks above Vwap and avoiding stocks that have a history of traps. When a stock has done a couple traps already and you you so you're not going to see the traps as clearly on Macd because it's a lagging indicator and it sort of smooths out.

But when you see on the chart that a stock has done some really nasty traps where it did like a false breakout and there's a huge red candle, something like that, you know that's when you say okay, You know what? This stock's not trustworthy. I cannot trust it. So regardless of the Macd, regardless of the chart pattern, I just know it has a history of doing these really nasty false breakouts and I'm not going to go back for it. And so that has also helped me stay out of some of these, um, higher risk trades.

So you know each day as I sit down. The game plan, as always, as it was today, is to look at the top gappers in the market and this morning our leading gapper is 61. Okay, so that's a pretty good gap. or it's not huge Macd.

Obviously you can see declining mountains. It's actually gone. Negative stocks below V Wap. So the Macd is saying no.

The V Wap is saying no. You do have one false breakout on this, but I probably if it's if it did open up higher, I would still consider it despite that. But in any case, it's a cheaper stock, so I'm leaving that one alone. The next one down is G-e-h-i So G-e-h-i is also a cheap stock and this one has very little price action.

So um, that's There's really no chart pattern. The Macd is negative as the moving averages are converging. No trades on that aeri. This is an acquisition.

So when this happens, a stock basically just is pinned at this level. So this is just going to go flat and basically stay flat. No trades Hsdt. This is the fourth leading gapper in the market.

It's up 29 and here you have a nice mountain range. This is a very nice mountain range mountain range up. So what's different about this on this pullback? Here, It really didn't pull back too sharply. it pulled back down to support the moving averages, didn't cross against each other.

They didn't go negative, right? So yes, we were below the signal. but just very nice steady pullback, and then a strong breakout from 60 cents up to 68.. and then another pullback. This one was a little sharper, but it bases out and then it goes again.

So it is a little on the cheaper side, which is keeping me out of it. But the price action has not been terrible, it's not been too bad Avya. So for me it's also a combination of knowing that I like to trade stocks that are usually between like two and twenty dollars the cheaper ones I don't prefer for a variety of reasons. But um, one of them is, um, because in order for me to make good money, I have to buy a huge amount of shares and then I deal with slippage.

Um, so this one, um again, this kind of going into it's just sort of consolidating here, so this one to me doesn't look, um, quite as interesting. Your Macd is sort of declining a little bit, going kind of flat. I lag this one did pop up earlier. You got this kind of move at about 7 45 and uh, I was watching it and I thought okay, you know the Macd is all right on this.

Okay, Macd's okay, this this is a possibility for a long over 66. Unfortunately there was a problem. The problem for me was that on the daily chart this stock to me was on the back side of the move and it had already done a couple of dead cat bounces and at this point it was just overdone. It has just to me sold off too much.

So without a fresh catalyst without news, I didn't think I could trust it. So it wasn't the chart that kept me out of it. This was a little bit. It wasn't the intraday chart, it was a bit more of the daily chart and the lack of fundamentals to support the move.

Uh, and at this point you know we're really working our way down the scan. I mean there's just as you can see. For whatever reason, there's not a lot uh going on this morning. So you know some days are like this: Indo this is a um, an oil energy stock.

So this one is a tricky one as well Because the daily being that it had this crazy move, this was the time to trade it right? And of course we did. I did. Many of many of you did who were trading at that time, but you know at this point now it's it's below. it's 200, you know.

So you've got a number of different technical factors, technical um, indicators that that you look at before taking a trade. You've got your moving averages, your exponential moving averages, You've got your price, action of gaps and windows on the daily chart, You've got your intraday chart, you've got your volume, weight, average price, and then the final one. if I'm thinking about taking that trade is, you know, looking at Macd, So Indo, it could be interesting over nine, but it's just not there. Um, it's not there yet.

So and really, it needs to get over 10 to get over the 200 moving average. Uh, let's see, we already looked at Blue Apron. Let's see, um, wetg this one. There was some news on it this morning, but the daily chart kept me out of it.

It's just sold off way too much. It just doesn't look good right now. So that was a no-go And you know, yeah, at this point it just kind of. We get to a certain time in the morning where I'm like, all right, it feels like if we were gonna have some really hot momentum, we'd already have it.

So we've got four minutes to the opening bell. So here's the game plan for today and how it pertains to Macd: The game plan for this morning. We do have an ipo that's going to come up this morning, so I will be watching that ipo closely. Uh, it's a, um, a stock that I think we'll definitely keep a close eye on.

So the ticker is Stbx. So Stbx that's going to ipo today. So I have that on a side chart as a maybe. And given the fact that our scanners are pretty dead right now, if something starts to hit the scanners and it's on the front side of the move, I think a lot of traders are probably going to jump on it because there's a lot of traders out there right now.

They're sitting, you know, kind of ready to jump on. They're just waiting for something to pop up. So right now I'm right there with them waiting for something to pop up If something starts to pop up. most likely as long as the very beginning of the move like this, your Macd is going to be going like straight up, so Macd won't be a problem.

You're buying right? Basically, as it starts to open up, we're looking for the pullback. first, candle to make a new high, etc, etc. Again, those tuning in on Youtube. I'll put the link for micro pullbacks.

Uh, the micro pullback strategy Pdf down below Ape. Well, so here's the problem with Ape. Traded it yesterday, made some money on it, but it was very choppy. The price action was not clean, and it sold off pretty hard.

So while it is back up here, um, you know, around seven, and while some traders may take a trade on it for a break of seven, it wasn't clean on breakouts. So the problem on this one is that the stock has already proven that it's not super trustworthy. and for that reason, it's out. That's it.

I'm ruthless. I'm I'm not going to give it another shot. You know it. It's already proven itself to to not be trustworthy.

So unfortunately, I gotta. I gotta break up with this one. I'm sorry. Uh, it's not you.

it's me. All right. So Ape is off off the radar. Um, you know.

And so yeah, that's that's that's where we're at. here. We're sitting this morning without a ton of, um, great looking setups, but it only takes one. and if one stock you know, like Psi do or something like that all of a sudden hits the scanner and starts moving up.

we can watch it closely. The reason I didn't jump in this one again daily Chart: Didn't like it, It's overdone. It's just. I just didn't trust it.

So I hope this, um, brief episode on using Macd in your day trading has been helpful. If it has those who have tuned in, I hope you hit the thumbs up. I'm going to put a recommendation to a couple other episodes I think you'll like. I'll put them right here and right here, so make sure you guys check those out.

I think it's going to help you as you continue to learn. There'll be a link down in the description for the micro pullback strategy Pdf, so I hope you check that out as well. And I want to thank you guys for tuning in. Unfortunately, no trades during uh, today's morning show which ended up being a special episode on day trading with Macd.

but that's okay. We'll try it again tomorrow so I'll be back as always. first thing tomorrow morning. All right.

Thanks guys for tuning in. Warrior Members Day Trade Dash members. We're going to keep trading here. At the opening bell, I.