If you are a day trader, you must be looking for day trading strategies that work. But your search from other sources must have always proven unfruitful.
That might be the very reason you are here right now because however much you failed in your search; you still believed that there is one good site out there with the best strategies.
A sister just as trusted and popular as Joon online.
In this post, I will show you 7 best day trading strategies that actually work. I guess I do not need to tell you to read till the end. Haha.
And again, if you choose not to read to the last full stop, your loss.
- 1 You can make a kill day trading if you apply these strategies:
- 2 Momentum Trading.
- 3 Gap and Go Strategy.
- 4 Pullback Trading.
- 5 Moving Average Strategy.
- 6 Breakout Strategy.
- 7 Candlestick Pattern Strategy.
- 8 Reversal Strategy.
- 9 Wrapping up on the Best Day Trading Strategies that Actually Work
You can make a kill day trading if you apply these strategies:
- Momentum Trading.
- Gap and Go Strategy.
- Pullback Trading.
- Moving Average Strategy.
- Breakout Strategy.
- Candlestick Pattern Strategy.
- Reversal Strategy.
Most times, the prices of assets move so fast and significantly in one direction.
That is referred to as momentum, and some assets may actually move by more than 50% in minutes.
The trick is in catching the price before it rallies significantly in that direction.
But then how can you catch a momentum which has not yet occurred?
It is very simple.
Most price momentum occurs at the time of opening of the markets and after the release of related news.
You can try to predict the direction of momentum after or before these events you can succeed in momentum trading.
Gap and Go Strategy.
Trading gaps are commonplace on price charts and so you cannot miss them while day trading.
Gap and go strategies are conditions where a candlestick opens way lower or higher than the close of the previous leaving a gap.
But what causes trading gaps though?
Several factors including news releases and at the opening of the markets due to demand and supply shifts.
The gap and go strategy involves trading in the direction the gap occurs.
If you spot a gap-up, you trade upwards and trade downwards once a gap-down comes up.
You may consider waiting for the gap to fill if you are opening small trades or even trade right away if opening long-term trades.
A pullback is a short-term move of the price against the previous trend before such trend resumes.
Usually, long uptrends and downtrends don’t just occur from the beginning to the end.
A few short-lived reverses will occur here and there but the trend will resume in the previous direction.
Be able to tell a pullback from a trend reversal by looking at volume changes.
If a reverse in a strong trend is accompanied by an increase in volume, then you rule out a trend reversal and prepare to trade such a pullback.
Wait till the initial trend begins to resume and right after a suitable signal, enter the market.
Pullbacks occurring after breakouts have a high success rate too. We shall discuss the breakout strategy shortly.
Moving Average Strategy.
Moving averages can be used to form a very sure trading strategy. These are used in pairs where one has a shorter period while the other has a longer period.
So how do you trade the moving average strategy?
By observing moving average direction and crossovers as well as the price behavior in respect to the moving averages.
When to buy:
- The moving averages point upwards.
- The shorter period moving average crosses over the longer period moving average upwards. If you are using two MA’s.
- Price trades above the moving averages without breaking downwards.
When to sell:
- Moving averages point downwards.
- The shorter period moving average crosses over the longer period moving average downwards.
- The price trades below the moving averages without breaking upwards.
A breakout is the tendency of the price to break out of a predetermined range and rally away from such a range. This means that there can’t actually be a breakout unless there was a range in the first place.
Determine a range of levels where the price tends not to break upwards or downwards first. Then wait until that level is broken in any direction.
When you see the price breaking out of the range, don’t trade.
Wait until the price falls or rises again to that same level it has broken and still fails to break back into the range.
If the retesting occurs severally with success, it is time to enter.
Remember breakouts can also leave you behind if you do not execute trades with speed as soon as they are confirmed.
Remain keen therefore to enter the trade right.
Candlestick Pattern Strategy.
The candlestick price chart can provide you very useful hints to the future movement of the price in form of candlestick patterns.
These are formations of candlesticks singly or in groups that have buy or sell implications.
Common bullish candlesticks occur towards the end of a downtrend to show an impending rise in the price.
They include the bullish engulfing, the hammer, inverse hammer, morning star, three white soldiers, and the piercing line patterns.
Most bearish candlestick patterns occur near the end of an uptrend and imply an impending price fall.
These are the likes of the bearish engulfing, hanging man, shooting star, evening star, three black crows, and the dark cloud cover.
The reversal trading strategy capitalizes on buying low and selling high.
There are those times that the price will post extreme highs and lows which you feel should actually reverse.
But have you noticed that just when you think that this is an extreme high or low, the price has a way of proving you wrong?
So do we ditch this whole reversal strategy thing for that?
There is a way you can determine that this is actually an extreme high or low and is going to breed a price reversal.
This is if the extreme high coincides with a resistance level or the extreme low coincides with a support level.
You can also use other checks like overbought and oversold conditions to decide when to enter a trade.
Wrapping up on the Best Day Trading Strategies that Actually Work
Remember to incorporate robust money management strategies with all the trading strategies.
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