THE MA
VWAP/MVWAP TRADING
STRATEGY!
 
 
 
 
 
 
 
 
 

 
 
 
 
 
TheMintInvestments.com
 
Copyright © 2021 Lode M. Loyens
 
All Rights Reserved
 
 
 
  
 
 
 
DISCLAIMER
 
 
Copyright © 2021 Lode M. Loyens
 
 
All Rights Reserved.  No parts of this book
may be reproduced or used in any manner
without the prior written permission of the
copyright owner, except for the use of brief
quotations in a book review.
 
To request permissions, contact the publisher at
publishit@themintinvestments.com
 
 
 
Publisher: TheMintInvestments.com
 
 
  
 
 
 
WARNING
 
 
You should not trade FOREX, Stocks, Futures,
or other commodities unless you are prepared to
sustain a total loss of the money you have invested,
plus any commission and/or other transaction charges.
 INTRODUCTION:
 
I’ve been trading strictly Forex nearing 15 years now.  And, I’ve been quite
successful at it.  But when the pandemic took hold of the world end 2019
and devastated the global economy, trading Forex became a nightmare.
 
The currency market shifted up and down like a run-away roller coaster
completely out of control.   Long term trading was out, scalping was in.  It
was the only way to still make some money.
 
At the same time other venues were booming.  As more and more people
were forced into lock down, online buying busted wide open resulting in the
stock market reaching new highs as companies reported mega profits.
 
Of course, I wanted to be on that side of the fence.  It didn’t make sense to
trade a losing market when another market was making money foot over
fist.
 
The only problem with trading stocks is that as a day trader (someone who
places more than three day trades in five business days ) I would be
subjected to the Pattern Day Trading Rule which specifies I must have at
least $25K in my account when entering a position.
 
Personally, I am not keen on having $25,000 sitting idle in an account and
earn zero dollars interest on it whilst I wait for the market to throw me a
bone.
 
Besides, trading stocks is too involved to my liking, considering all the
preliminary research that has to go into it just to find a stock worth trading
in the first place.
 
I prefer simple stuff.  That’s why I’ve been trading Forex all these years.
 
I decided to trade Futures instead; for one reason:  it offers everything. 
Forex, Stocks, Bonds, Commodities, etc.; allowing me to chose which
market I wish to trade; making it the perfect vehicle to outwit the turbulence
that was going on with Forex.
 
Now I don’t trade Futures in the sense that a farmer or commodities trader
would trade them.  I don’t buy a bushel of corn today and lock in a higher
sell price some time down the road.
 
I don’t know anything about farming; besides, I need to content with the
whimsicals of the weather and other factors that will determine the price of
a bushel of corn several months from now.  That’s too complicated and too
risky for me.
 
Rather I trade Futures the same as I trade Forex; by analyzing charts, and
determining trends and support and resistance levels.
 
Futures trading also allows me to trade Micro E-minis (small lot sizes for
less money), as well as E-minis, regular lot sizes, and I can trade nearly
around the clock, just like Forex.
 
 
Now that you know my reasons for making the switch from Forex to
Futures trading, what follows next is a trading method I use to trade various
Futures assets.
 
 
 MY FUTURES ASSETS
 
My Futures trading is limited to 11 assets:
 
Micro E-minis:
 
Russell 2000,
S & P 500,
Dow,
Nasdaq.
 
E-minis:
 
Russell 2000,
S & P 500,
Dow,
Nasdaq.
 
Forex:
 
E-Micro EUR/USD.
 
Commodities:
 
Gold,
Crude Light (oil).
 
 
The four indices incorporate a variety of stocks.  I only need to study the
index I want to trade, not every single stock in it, making trading much
easier.
 
I picked EUR/USD because that’s the currency pair I have been trading
these past 15 years.  I added gold and oil because they are easy to analyze
and popular.
 MY TRADING METHOD
 
Platform:
 
MetaTrader 5 
 
I’ve been using MT4 for a very long time and wasn’t interested in learning
an entirely new platform.  MT5 was the obvious choice.
 
 
Setup:
 
Chart : 1 Hour
 
Pattern : Candlesticks
 
Indicators:  - Standard Moving Average
 

 
 
 
 
 
 
 
 
 
 
 
 - VWAP/MVWAP combo
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
I am using the Close Calculation Type because it is the most accurate for
this trading method.
 
 
The VWAP/MVWAP indicator does not come standard with MT5 and must
be downloaded and installed separately. 
 
You can download it from my website free of charge.
 
 
Please consult online if you need help with installing and activating an
indicator on MT5.  There are plenty of free videos available.
 
If you use a different platform, please consult with your broker.
 
 
 CHART LAYOUT
 
 

 
VWAP indicator colored Dodgerblue,
 
Moving Average indicator colored Black and Dotted,
 
MVWAP indicator colored Orange.
 
 
Of course you can use your own coloring scheme. 
 THE STRATEGY
 
This is a trend based trading method. 
 
 
Steps:
 
1. Define trend,
2. Define entry point,
3. Define exit point.
 
 
1. DEFINE TREND:
 
Trend is defined as uptrend, downtrend or sideways.
 
 
1.1 Uptrend:
 
Market is in an uptrend when VWAP and MA float above MVWAP.
 
 
1.2 Downtrend:
 
Market is in a downtrend when VWAP and MA float below MVWAP.
 
 
1.3 Sideways:
 
Market goes sideways when MA floats on top of or almost on top of
VWAP.
 
 
 
 
Chart with trends defined
 
 

 
 
**NOTE:
 
I prefer to use the term ‘FLAT’ instead of sideways.  As you can tell from
looking at the chart, the 2nd and 3rd black arrow from the left indicate a
sideways market, according to our trend definition rule, even though the
market is moving upwards.
 
That can be a bit confusing.  Therefor, the word ‘FLAT’ better describes the
trend of the market.
 
 
Henceforth whenever you read the word ‘FLAT’ it indicates the market is
going sideways.
 
 
Never trade when market goes (is) flat.
 
Never trade if not ALL conditions are met.
 
 
2. DEFINE ENTRY POINT:
 
 
2.1 Buy signal:
 
A BUY signal is defined when the MA crosses over the MVWAP upwardly.
 
 

A Buy signal does not mean ‘open a position’.  It means a possibility to

open a position may be forth coming.
2.2 Sell signal:
 
A SELL signal is defined when the MA crosses over the MVWAP
downward.
 
 

A Sell signal does not mean ‘open a position’.  It means a possibility to

open a position may be forth coming.
3. OPEN BUY/SELL POSITION:
 
 
3.1 Open Buy Position:
 
Open Buy Position when VWAP has crossed upward over MVWAP but
only if MA has also crossed upward over MVWAP.
 
 

 
 
No Buy position is opened if not both conditions are true.
3.2 Open Sell Position:
 
Open Sell Position when VWAP has crossed downward over MVWAP but
only if MA has also crossed downward over MVWAP.
 
 

 
 
No Sell position is opened if not both conditions are true.
 
 
 
 
The closer the MA and VWAP are together when crossing the
MVWAP the stronger the Buy/Sell signal is.
 

 
4. DEFINE EXIT POINT:
 
 
4.1 Buy exit:
 
Close Buy position when first bear candle closes below MA.
 
 

 
 
4.2 Sell exit:
 
Close Sell position when first bull candle closes above MA.
 
 

 
 
 
This concludes the MA/VWAP/MVWAP trading method.
 
This is a simple trading strategy with clearly defined rules.  If you apply
this strategy without modifying it you will experience great results.
 
 
As always; practice first until you are comfortable with this method and
understand it fully before testing it out on your live account.
 
 THE LONG RUN
 
UNADVERTISED BONUS:
 
 
As good as this trading method is there is a way to make it even better and
it’s simple too.
 
Here’s all you have to do:
 
 
Instead of closing an open position at the first bear/bull candle that
closes above/below MA, let the market run until the 1st bear/bull candle
closes above/below the VWAP.
 
 
In the chart below you would have closed the open SELL position when the
1st bull candle closed above the MA (indicated by the blue arrow).
 
That decision was in compliance with the standard rules of this trading
method.
 
 
But rather than closing the position, we keep it open until the 1st bull
candle closes above the VWAP instead. 
 
In case of a Buy position, we would keep the position open until the 1st bear
candle closes below the VWAP.
 
 
This results in a much longer and much more profitable trade (indicated by
the green arrow).
 
 
As of writing this ebook the trade was still going strong. 
 
A bull candle formed (right after the blue arrow) that touched the VWAP
but retraced back to the MA, closing below it.
 
Since then, no bull candle has closed above the VWAP thus keeping the
position open.
 
 
**NOTE:
 
The second last candle on the chart is on top of the VWAP but it is a BEAR
candle.  Since we are in a SELL position, only a BULL candle signals an
exit point and we keep the position open.
 
The same Long Run Rule applies with an open BUY position.
 
 CONCLUSION
 
As you can probably tell by the many ebooks I’ve written: I love to trade;
it’s in my blood.
 
I find trading fascinating, inspiring, and rewarding.  More than anything I
love to trade because it is the one thing I can do entirely by myself for
myself.
 
After having owned a multitude of businesses in different venues I grew
tired of the constant headaches with vendors, employees, and even
customers.
 
Trading gives me the peace of mind knowing that whatever results I achieve
are entirely of my own doing.  Personally I find this exhilarating and very
freeing.
 
What’s more; I am completely self-taught and everything I know today
about trading I learned by checking out free trading resources online and
applying that knowledge by demo trading.
 
You can do it too.  All you need is desire to succeed and commitment. 
 
Don’t look for overnight riches or that magical strategy.  The magic is in
you.  You steer the boat.
 
Above all have fun when you trade.  Don’t focus so much on being
profitable but on the process itself; money will come by itself; almost as an
afterthought.
 
 
Stay Well and as always; happy trading.
 
 
Lode M. Loyens