Simple Day Trading Strategies that Work
There are many day trading strategies that are available and a quick search on various forex forums or other websites will reveal day trading strategies. While some are simple, others are complex and often involve some fancy indicators to work. Sometimes, simplicity is best and in this day trading strategy we offer a very easy to use day trading strategy that combines simple candlestick patterns and just a horizontal line tool. This simple day trading strategy involves trading the breakouts. The breakouts in this simple day trading strategy involve buying the breakout above the previous day’s high or selling the breakout below the previous day’s lows.
Simple day Trading Strategies – Rules
The first step is to make use of a one-hour chart. Looking at the previous day’s price action, using the horizontal tool, mark the previous day’s high and the previous day’s low.
Now, simply wait for prices to breakout above the high or the low. The next step is to wait for a bullish candlestick pattern to be formed. Because prices are already in a bullish or bearish momentum when they breakout from the previous day’s high or low, we only look for engulfing candlesticks which signal a continuation.
- Prices break above previous day’s high
- After the breakout, look for a bullish engulfing candlestick and then buy at the engulfing candlestick’s high with stops at the recent low below the breakout
- Exit at end of day
- Price break below previous day’s low
- After the breakout, look for a bearish engulfing candlestick and then sell at the engulfing candlestick’s low with stops at the recent high above the breakout
- Exit at end of day
In the first chart, we see that prices broke out from the previous day’s high. Then there was a bullish engulfing candlestick pattern that was formed on a brief retest back to the breakout high. Long positions are entered on the engulfing candlestick’s high with stops set to the recent low below the break out. The trade is then exited by end of day.
Simple Day trading strategy – Buy set up example
The next chart below illustrates the sell set up, where a strong bearish engulfing was formed after prices broke out from the previous day’s lows. Selling at the low of the bearish engulfing candlestick with stops at the high above the breakout level resulted in fairly decent profits while exiting end of day.
Simple Day trading strategy – Sell set up example
The above two examples show how simple this day trading strategy can be to trade. Traders can further look towards modifying this simple day trading strategy by ensuring that they only pick out the currencies that show the potential for a break out. Combining with Candlestick patterns, this day trading strategy does not require any additional indicators or tools and simply relies on the strengths and weakness shown by the markets in real time as they appear. The lack of any indicators also means that there is no lag and trades are taken as they happen. By paying attention to only good risk set ups or low risk set ups, traders can use this simple day trading strategy to start making profits consistently.
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