The Only Day Trading Strategy I Would Use If I Could Start Over…

The Only Day Trading Strategy I Would Use If I Could Start Over…
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Trading Strategy

The internet contains numerous day trading strategy setups and systems. While some may be profitable, the strategy shared in this video is recommended for beginners or struggling traders. The strategy involves specific rules, serving as a checklist for placing trades in day trading.

The first step is to identify the direction by checking the trend on the four-hour chart. The strategy focuses on an uptrend, where prices consistently make higher highs and higher lows above the 50 EMA (Exponential Moving Average). This involves identifying the previous level of resistance that is likely to become support in an uptrend. The strategy aims to buy within this zone. The key is to wait for a clear trend and a clear level of support.

After establishing the direction and the level, the trader waits for price to pull back to the identified zone. Subsequently, they switch to a day trading timeframe, such as the 15-minute chart. On this chart, the trader looks for specific chart patterns—either a double bottom or a head and shoulders pattern—within the support zone.

Trend Identification

The entry is triggered by the breakout of the neckline of the identified pattern. The video emphasizes the importance of patience and waiting for confirmation through a clear breakout. The strategy uses the four-hour chart for trend identification and structural levels and the 15-minute chart for entry confirmation.

Additionally, the presenter introduces the concept of “CEST,” which stands for Conditions, Entries, Stops, and Targets. This acronym represents the framework for consistent trading. The video concludes by showcasing a real trade example on the CAD/JPY (Canadian Dollar/Japanese Yen) currency pair, demonstrating how the strategy is applied in practice.

The presenter also briefly mentions a bearish version of the strategy, which involves identifying a downtrend and looking for selling opportunities when prices approach a previous support level. The entry criteria remain the same, involving specific chart patterns and breakout confirmations.

Overall, the strategy aims to provide a rules-based approach for day trading, emphasizing the importance of trend identification, structural levels, and specific entry patterns.

Possible trade

Now, because we’re below the 50 EMA, creating lower highs and lower lows in a downtrend, the next step is to identify the area for a possible trade. Once in the designated zone, the next step is to wait for potential entries. As the price enters the zone, the trader looks for double tops or head and shoulders patterns on lower time frames.

The video walks through an example where a double top forms within the zone. The trader waits for a break below the neckline of the double top for a valid trade entry. The stop-loss is placed above the zone, and the target is set between structural levels.

The video emphasizes that losses are an inevitable part of trading. Even the presented strategy doesn’t guarantee a 100% success rate. Traders should manage their risk wisely and not risk an excessive percentage of their account on each trade, especially when they are beginners or struggling traders.

Risk management is crucial for mitigating emotional responses during losses. Traders are advised to have more confidence in their systems by backtesting them. Backtesting involves applying the strategy rules to historical data to evaluate its past performance. This process provides a statistical foundation for determining the likelihood of future profitability.

The video concludes by mentioning a mentoring opportunity within the TDC Forex University for new or struggling traders. The University offers a comprehensive course, weekly trade reports, trading alerts, and direct contact with the presenter. The emphasis is on mastering a profitable strategy, effective risk management, and developing a resilient trading mindset.

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