Strategies

Daily trading strategies are essential if you want to profit from frequent, small price movements. A consistent and effective strategy is based on in-depth technical analysis, using charts, indicators and patterns to predict future price movements. This page gives you a complete breakdown of trading strategies for beginners, to work on advanced, automated and even asset specific strategies. It will also describe some regional differences to consider, and point you in the direction of helpful resources. Ultimately, however, you need to find a day trading strategy that suits your specific trading style and requirements. Also, make sure that your broker selection matches the daily trading strategy. You want things like:

• Excellent commercial execution speed;
• Price action data (+ level 2 if possible);
• Ability to trade directly from charts;
• Trade automation;
• Stop losses and take profit orders;
• And so on etc.

Trading Strategies for Beginners

Before you get stuck in a complicated world of highly technical indicators, focus on the basics of a simple daily trading strategy. Many people make the mistake of thinking that they need a very complicated strategy to be successful during the day, but often, the more direct, the more effective.

The Basics

Incorporate the invaluable elements below into your strategy.

• Money management: before you start, sit back and decide how much you are willing to risk. Keep in mind that the most successful operators will not use more than 2% of their capital per operation. You need to prepare for some losses if you want to be there when the profits start to come.
• Time Management: Don’t expect to make a fortune if you only allocate an hour or two a day to trading. You must constantly monitor the markets and be aware of business opportunities.
• Start small: As you find your feet, stick to three actions in one day. It’s better to be some good than to be average and not make any money.
• Education: understanding the intricacies of the market is not enough, you also need to stay informed. Be sure to stay on top of market news and events that affect your asset, such as a change in economic policy. You can find a wealth of financial and business resources online that will keep you informed.
• Consistency: It is harder than it seems to keep emotions in check when you have five cafes inside and you are staring at the screen for hours. You must let math, logic and strategy guide you, not nerves, fear or greed.
• Moment: the market will become volatile when it opens each day, and while experienced traders can read patterns and earnings, you have to bide your time. So wait for the first 15 minutes, you still have hours.
• Demo account: a must for every beginner, but also the best place to take a backup test or to experiment with new or refined strategies for advanced traders. Many demo accounts are unlimited, so there are no time limits.

Components Every Strategy Needs

Whether you are looking for automated daily trading strategies or beginner and advanced tactics, there are three important components to consider; volatility, liquidity and volume. If you want to make money from small price movements, choosing the right action is essential. These three elements will help you make the decision.

• Liquidity: this allows you to enter and exit trades quickly at an attractive and stable price. For example, strategies for liquid products focus on gold, crude oil and natural gas.
• Volatility: tells you potential earnings. The greater the volatility, the greater the profits or losses you can earn. The cryptocurrency market is one such example which is known for its high volatility.
• Volume: This measurement will tell you how many times the stock / asset has been traded within a specified period of time. For day traders, this is better known as ‘average daily trading volume’. A high volume indicates that there is significant interest in the asset or security. An increase in volume is often an indication that a price jump, either up or down, is fast approaching.

5-day trading strategies

1. Breakout

Breakout strategies focus on when the price clears a specific level on your chart with higher volume. The breakout operator enters a long position after the asset or the security falls above resistance. Alternatively, enter a short position once the stock breaks below support. After an asset or security is listed outside the specified price barrier, volatility generally increases, and prices tend to break. You need to find the right tool to trade. In doing so, you need to be aware of the support and resistance levels of the asset. The more frequently the price has reached these points, the more validated and important it becomes.

Entry points

This part is nice and direct. Prices set at the closing and higher resistance levels require a strong position. Prices that are set to close and below a support level are needed is a positive position.

Plan your excursions

Use the recent performance of the asset to determine a reasonable strike price. Using graphic patterns will make this process even more accurate. You can calculate the average recent price movements to create a target. If the average price change was 3 points in the last price changes, that would be a reasonable goal. Once you reach the goal, you can exit the trade and enjoy the profits.

2. Scalping

One of the most popular strategies is scalping. It is especially popular in the currency market and tries to profit from price changes per minute. The driving force is quantity. It will attempt to sell once the trade is profitable. It’s a fast and exciting way to trade, but it can be risky. You have a high probability of trading to match the low-risk-to-reward ratio. Beware of volatile instruments, attractive liquidity and up-to-date. You can’t wait for the market, you need to lose trades as soon as possible.

3. Momentum

This strategy, popular among beginner trading strategies, deals with news sources and identifies significant trend movements supported by large volumes. There is always at least one stock that moves about 20-30% per day, so there are plenty of opportunities. Just hold your position until you see signs of reversal and then pull out. Alternatively, it could fade the price cut. This way, your hit price is once the volume starts to drop. This strategy is simple and effective if used correctly. However, you should make sure that you are aware of the news and earnings announcements. Just a few seconds in each trade makes all the difference in your earnings at the end of the day.

4. Backlash

Although much discussed and potentially dangerous when used by beginners, reverse trading is used worldwide. Also known as trend trading, trend reversal and a medium reversal strategy. This strategy defies basic logic as it aims to trade against the trend. You must also be able to accurately identify potential setbacks in addition to predicting your strength. To do this effectively, you need a deep knowledge and experience of the market. The ‘daily pivot’ strategy is considered a unique case of reverse trading, as it focuses on buying and selling daily lows and highs.

5. Use of hubs

A daily trading pivot strategy can be ideal for identifying and acting on critical support and/or resistance levels. This is especially useful in the forex market. Furthermore, distance limit traders can use it to identify entry points, while trend and breakout traders can use pivot points to locate key levels they need to break for a move to count as a breakout.

Turning point calculation

A turning point is defined as a turning point. Use the prices of the previous day’s highs and lows, plus the closing price of a security to calculate the pivot point. Keep in mind that if you calculate a pivot using price information for a relatively short period of time, the accuracy often drops. How is a pivot point calculated?

• Center Pivot (P) = (High + Low + Lock) / 3

You can then calculate the support and resistance levels using the pivot point. To do this, you must use the following formulas:

• First resistance (R1) = (2 * P) – Low
• First support (S1) = (2 * P) – High

The second level of support and resistance is calculated as follows:

• Second resistance (R2) = P + (R1-S1)
• Second support (S2) = P – (R1- S1)

Application

For example, if applied to the FX market, you will find that the trading interval for the session often occurs between the pivot point and the first support and resistance level. This is because a large number of operators play this series. It is also worth noting: this is one of the systems and methods that can also be applied to indexes. For example, it can help form an effective daily trading strategy for S&P.

Limit your losses

This is especially important if you use margin. The requirements that the traders face on a daily basis are high. When you trade on margin, you are increasingly vulnerable to sudden price movements. Yes, this means the potential for higher profits, but it also means the possibility of significant losses. Fortunately, you can use stop loss. Stop loss controls your risk for you. In a short position you can place a stop loss above a recent high, for long positions you can place it below a recent low. You can do that too, depending on volatility. For example, the price of a share is moving at £0.05 per minute, so it places a stop loss of £0.15 away from its entry order, allowing it to swing (hopefully in the expected direction). A popular strategy is to set two stop losses. First, place a physical stop loss order at a specific price level. This is the largest amount of capital you can afford to lose. Second, you create a mental stop loss. Place it at the point where your access criteria are violated. So if the stock market takes an unexpected turn, it will come out quickly.

Forex Trading Strategies

Forex strategies are risky in nature because you need to accumulate your profits within a short period of time. You can apply any of the above strategies to the forex market, or you can visit our forex page for detailed examples of strategies.

Cryptocurrency Trading Strategies

The exciting and unpredictable cryptocurrency market offers many opportunities for the day trader. You don’t need to understand the complex technical makeup of bitcoin or ethereum, nor do you need to have a long-term view of their viability. Simply use strategies to profit from this volatile market. Visit our cryptocurrency page to find specific cryptocurrency strategies.

Strategies for stock trading

Daily stock trading strategies are based on many of the same principles outlined on this page, and you can find many of the strategies described above. Below is a specific strategy you can apply to the stock market.

Cross moving average

You need three lines of moving average:

• A set in 20 periods: this is your fast moving average
• A set in 60 periods: this is your slow moving average
• A set in 100 periods: this is your trend indicator

This is one of the moving average strategies that generates a buy signal when the fast moving average crosses and exceeds the moving average. A sell signal is simply generated when the fast moving average crosses below the slow moving average. Therefore, it will open a position when the moving average line crosses in one direction and close the position when it crosses again in the opposite direction. How can you determine that there is definitely a trend? You know the trend is active if the price bar stays above or below the 100-period line.

Separate Betting Strategies

Spreadsheets allow you to speculate in a large number of global markets without owning the asset. The strategies are also relatively simple.

CFD strategies

Developing an effective day trading strategy can be difficult. However, look for a tool like a CFD and your job can be somewhat easier. CFDs are concerned with the difference between where an operation is entered and exited. In recent years, its popularity has increased. This is because you can profit when the underlying asset moves relative to the position taken, without having to own the underlying asset.

Regional differences

Different markets have different opportunities and obstacles to overcome. Day trading strategies for the Indian market may not be as effective when applied in Australia. For example, some countries may be wary of the news, so the market may not react the same way you would expect them to back home. Regulations are another factor to consider. Indian strategies can be tailored to fit specific rules, such as high minimum capital balances in margin accounts. So go online and see if the dark regulations won’t affect your strategy before putting your hard-earned money to use. You may also find that different countries have different loopholes to jump. If you live in the West but want to apply your usual day-to-day business strategies in the Philippines, you need to do your homework first. What kind of taxes will you have to pay? Will you have to pay it abroad and/or at home? The marginal tax differences can have a significant impact on your earnings at the end of the day.

Risk Management

Stop loss

Strategies that work take risk into account. If you don’t manage any risk, you’ll lose more than you can afford and be out of the game before you know it. Therefore, you should always use a stop loss. It may seem like the price is moving in the direction you expected, but it can reverse at any time. A stop loss will control the risk. You will exit the transaction and suffer only a minimal loss if the asset or security does not materialize. Skilled traders generally do not risk more than 1% of their account balance in a single trade. So if you have £27,500 in your account, you can risk up to £275 per trade.

Position size

This will also allow you to choose the perfect position. The position size is the number of actions done in a single operation. Take the difference between your entry and stop loss prices. For example, if your entry point is £12 and your stop loss is £11.80, then your risk is £0.20 per share. Now divide £275 by £0.20 to calculate how many trades you can make in one trade. It can take a position size of up to 1,375 shares. This is the maximum position you can take to reach your 1% risk limit. Also check if there is enough volume in the stock / asset to absorb the size of your position. Also note that if you have a position size too large for the market, it will be possible for your entry and stop loss to slip.

Learning methods

Videos

Everyone learns in different ways. For example, some will find videos of daily trading strategies more useful. That’s why different brokers now offer different types of daily trading strategies for easy to follow training videos. Check out their learning and resources section to see what’s on offer.

Blogs

If you are looking for the best day trading strategies that work, online blogging is sometimes the right place. Often free, you can learn intraday strategies and more from experienced traders. In addition, blogging is a great source of inspiration.

The

Some people learn better from the forums. This is because you can comment and ask questions. You also often find daily trading methods so easy to use that anyone can use them. However, due to limited space, you usually only get the basics of daily trading strategies. Therefore, if you are looking for more detailed techniques, you can consider an alternative learning tool.

PDF files

If you want a detailed list of the best day trading strategies, PDFs are often a good place to go. The first advantage is that it is easy to follow. You can open them while following the instructions on your own candlestick charts. Another advantage is how easy it is to find. For example, you can find a day of trading strategies using a quick Google download action pattern with PDF download. It can also be very specific. Therefore, it is relatively simple to find specific commodity or forex PDFs. In addition, you will find that they are geared towards traders of all experience levels. Therefore, you can find PDF for beginners and advanced PDFs. You can even find country specific options like India PDF daily trading tips and strategies.

Books

With that said, a PDF simply won’t go into detail like many books do. The following books contain detailed examples of intraday strategies. Easy to follow and understand also makes it ideal for beginners.

• The Simple Strategy: A Powerful Daily Trading Strategy for Futures, Stocks, ETFs and Forex Trading, Mark Hodge
• Day Trading: A Detailed Guide to Day Trading Strategies, Risk Management and Trading Psychology, Ross Cameron
• Intraday Trading Strategies: Proven Steps for Trading Profits, Jeff Cooper
• The Complete Guide to Day Trading: A Practical Guide from a Professional Day Trading Trader, Markus Heitkoetter
• Stock Trading Assistant: Advanced Short-Term Trading Strategies, Tony Oz

Therefore, books and e-books on daily trading strategies can help you improve your trading performance.

Online courses

Other people find interactive and structured courses the best way to learn. Fortunately, there are now a variety of places online that offer such services. You can find courses on daily trading strategies for commodities, where you can be guided through a crude oil strategy. Alternatively, you can find FTSE hedging, gap and day hedging strategies.

Trade for a living

If you are looking to pack up your day job and start trading, you have a challenging but exciting journey ahead of you. You need to understand advanced strategies as well as effective risk and money management strategies. Discipline and a thorough understanding of your emotions are essential.

Final word

Your earnings at the end of the day will largely depend on the strategies you employ. Therefore, it is worth bearing in mind that it is often the direct strategy that is successful, regardless of whether you are interested in gold or the NSE. Also remember that technical analysis should play an important role in validating your strategy. Also, even if you decide at the end of the day to adopt early entry or trading strategies, controlling your risk is essential if you want to have cash in the bank at the end of the week. Finally, developing a strategy that works for you takes practice, so be patient.