Simple Day Trading Strategies
Active trading is the act of buying and selling securities based on short-term movements to profit from the price movements on a short-term stock chart. The mentality associated with an active trading strategy differs from the long-term, buy-and-hold strategy found among passive or indexed forexhero.info investors. Active traders believe that short-term movements and capturing the market trend are where the profits are made. Unlike a number of day trading strategies where you can have a win/loss ratio of less than 50% and still make money, scalp traders must have a high win/loss ratio.
The Simplest Trading Strategy!!!!
Traders in this growing market are forever looking for methods of turning a profit. So again, as a scalper or a person looking into scalp trading – you might want to think about cutting down on the number of trades and seeking trade opportunities with a greater than 1 to 1 reward to risk ratio.
These levels tend to act like ‘magnets’, attracting price to them before price pushes away again. They can also be thought of as https://forexhero.info ‘value areas’, or areas on the chart where price found ‘fair value’ which typically happens before a strong move occurs again.
Consolidation usually takes place before a major price swing (which in this case, would be negative). Learning about triangle trading and other geometric trading strategies will make you a much better swing trader.
Meet the 1-2-3 pattern, sometimes also known as the A-B-C pattern. With over 50+ years of combined trading experience, Trading Strategy Guides offers trading guides and resources to educate traders in all walks of life and motivations. We specialize in teaching traders of all skill levels how to trade stocks, options, forex, cryptocurrencies, commodities, and more. We provide content for over 100,000+ active followers and over 2,500+ members.
Being aware of economic or company specific news events is part of the risk/reward assessment. Since we can’t know in advance how the market will react to an economic release, avoid taking (or being in) trades three minutes before or after a high impact economic/company-specific data release. Check an economic-calender before the trading day begins, so you know the data release times.
Simple RSI Forex Trading Strategy
The next example is of a pin bar buy signal that formed at a key chart level of support in an up-trending market. When you get a price action signal that has confluence with a trend and a level, that is a good-quality trade setup. You won’t find a much better example than the one below that formed on the daily GBPUSD chart.
Using sound money management plan you can achieve return of 50-100% per year on your equity. Remember- Only 5% of day traders make money consistently. And trading strategy is not the number one reason for this. Failure to implement the strategy fully and not following the rules and guidelines is the number one reason for losses of majority of day traders.
- They can be used in any market condition; trending, counter-trend or trading ranges.
- Because you are not trading all throughout the day, it can be easy to be caught off guard if price trends do not play out as planned.
- Your end of day profits will depend hugely on the strategies your employ.
- And trading strategy is not the number one reason for this.
This is the EURUSD daily chart and we can see a very obvious fakey trading strategy formed at a key resistance level near 1.3950. This fakey signal showed a rejection and false breakout of that level, indicating that the bulls were exhausted and that price may fall lower in the coming days.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please read our Risk Disclosure statement. Our simple but effective strategies come with a warning, however.
It is how you keep your trading simple in real-time. It requires that you’ve done your homework though.
Day trading is of course all about trying to make profits, but it’s just as important to limit losses when things do not go as planned. If the GBP/USD rate slid below the 1.4300 level then clearly something has changed and the day trade could be exited for a small manageable loss. Many day traders use technical analysis and charts and would recommend a ‘clean’ approach to trading strategy. These traders prefer not to load their charts with lots of different indicators in order to try and second-guess direction.
This strategy is simple and effective if used correctly. However, you must ensure you’re aware of upcoming news and earnings announcements. Just a few seconds on each trade will make all the difference to your end of day profits.
Until a triangle pattern appears (or whatever your specific trade setup is) you have nothing much to think about. To be an effective trader you need a trade setup. In a sea of ever-changing conditions, you need to filter out all the non-relevant information on your chart. A setup is a precise set of conditions which must materialize to indicate a trade could happen.
Checkout Nial’s Forex Trading Course here. Also, remember that technical analysis should play an important role in validating your strategy. In addition, even if you opt for early entry or end of day trading strategies, controlling your risk is essential if you want to still have cash in the bank at the end of the week. Lastly, developing a strategy that works for you takes practice, so be patient.
