Day Trading Strategy
There are various methods which work fantastically with intra day trading. I find the below method though as being the best. If you master this method, you will win all your trades. Having said that, each trade requires a setup, and you need the below setup to start using this method:
- 25 period simple moving average on the daily chart
- Check the last candlestick color
- Check the direction of the trend from the 25 period simple moving average
- Always trade a fraction of your bankroll. In some cases you will require 2 - 4 times that amount.
If the last candlestick is green, and the trend is moving upwards, buy 1 lot. If the last candlestick is red and the trend is downards, sell 1 lot. If the last candlestick is green and the trend is down, do not enter any trades. If the last candlestick is red and the trend is facing upwards, do not enter any trades. Close the trade by the end of the day. This works 65%-75% of the time.
So, what would you do in the other 25%-35% of the time? What happens if you open a trade and you don't exactly nail it? Don't worry. If that's the case, then you have to follow these steps. In the scope of this excercise, lets assume that you have bought:
- Once you have reached -50 pips, place a sell order of 1.4 lots. Close both trades once the total of both returns a profit.
- If there is another reversal, and the price goes past the initial trade, place a buying trade of 1 lot. follow the same steps as above.
- If there is another reversal, follow the steps above, this time placing a sell order of 1.9 lots
By this time, you would have already closed the trades and made at least 10-15% profit from the initial lot amount. With this method, you will always come out on top.