The following Day-Trading strategies are characterized by the high Take Profit / Loss (P/L) Ratio

Introduction to Day-Trading Strategies

The day-trading strategies are very popular among Forex traders as they provide the chance of making fast and good profits on a daily basis. Day-traders are using high capital leverage and therefore they are exposed to high levels of market risk. Day-Traders are trading any pair among the Forex majors (USD, EUR, JPY, CHF, CAD, AUD, NZD) but they prefer three particular pairs EURUSD, GBPUSD and USDJPY as these pairs are offered with the tightest spreads in the market.

Characteristics of a Day-Trading Strategy

The following Day-Trading strategies are characterized by the high Take Profit / Loss (P/L) Ratio. The P/L ratio in Day-Trading strategies is far greater than in scalping strategies and exceeds it may even exceed P/L=2. Moreover, in contradiction with the scalping strategies you get a far less number of trades on a daily basis (3-6).

■ Daily Trades: 3 – 6 trades

■ Profit/Loss Ratio: 1.5 – 2.5

■ Leverage: 1:50 – 1:200

■ Spreads: very important (max 2.0-2.5 pips)

■ Slippage: very important

■ Overnight Charges: Day-Traders should not keep open positions overnight, therefore irrelevant

■ Upcoming News: they generally avoid trading 30 minutes before and after important news

As in the case of scalping, day-trading should be limited only in low-cost trading opportunities. That means a Forex Day-trader usually selects to trade only the Forex Majors. In the case of a Metals Day-Trader, he selects to trade Gold and Silver.

The trading cost of any Day-Traded can be limited by joining a Trading Rebate Plan Information about our free Rebate Plans

Day-Trading Strategies

TRADING STRATEGIES

ASSET AND TIMEFRAME

INDICATORS

TAKE PROFIT AND STOP-LOSS

MORE INFO

THE STOCHASTIC DAY-TRADING STRATEGY

■ M5 time frame

■ EURUSD and GBPUSD

■ 2-4 daily trades

Stochastic Oscillator

Settings at 5,3,3

Fibonacci Retracement

Standard settings

■ Take Profit:

40-50 pips

■ Stop-Loss:

15-20 pips

 

■ Profit/Loss Ratio:

2.5

The Stochastic Trading Strategy

BOLLINGER-RSI DAY-TRADING STRATEGY

■ M5 time frame

■ Forex Majors

■ 5-7 daily trades

Bollinger Bands

(i) 12 Periods

(ii) Deviations 2

(iii) Shift 0

 

■ RSI

The standard settings (14,9)

■ Take Profit:

50-70 pips

■ Stop-Loss:

20-25 pips

 

■ Profit/Loss Ratio:

2.5

Bollinger-RSI Day-Trade Strategy

BREAKOUT STRATEGY

■ Multiple Timeframes

■ Forex Majors

■ Metals and Energy

■ Stocks and Indices

■ 1-3 daily trades

■ Support/Resistance

■ Chart Patterns

■ MACD/RSI

MACD or RSI charts divergences

■ Variable Stop-Loss and Take-Profit levels

■ Profit/Loss Ratio:

Higher than 3

► The Breakout Strategy

TRADE THE FALSEBREAK CANDLE

■ Multiple Timeframes

■ Forex Majors

■ Metals and Energy

■ Stocks and Indices

■ 2-4 daily trades

■ Closest support and resistance levels

■ A Falsebreak candle.

■ Take Profit:

200-250 pips

 

■ Stop-Loss:

80 pips

■ Profit/Loss Ratio:

2.5

Falsebreak Candle Strategy

 

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STRATEGIES: ► DAY-TRADE | ► SWING-TRADE | ► SCALPING STRATEGY | ► BINARY STRATEGIES

FOREX RATINGS: ► DIRECTORY | ► TRADE SPREADS | ► FOREX REBATES | ► FOREX SCALPING | ► SWAP RATES | ► FUNDS SAFETY

 

 

 

Day-Trading Strategies

ForexExperts.net

FALSEBREAK CANDLE TRADING STRATEGY

"Trading Strategy using Support and Resistance Levels plus a Falsebreak Candle as a trigger"


TRADING STRATEGY

Style: Day-Trading Strategy

Name: Falsebreak Candle Trading Strategy

FINANCIAL ASSETS

Forex Majors



TIMEFRAME

■ M5 timeframe (5-minutes)

■ 5-7 daily trades



INDICATORS & SETUP

This simple strategy uses no indicators instead it uses the close support and resistance levels and a falsebreak candle.

■ Support and Resistance form a basic demand and supply price range

■ A Falsebreak Candle provides the trigger to trade it



TRADING SIGNALS

This is how you may implement the Falsebreak Candle Strategy:

First of all we must define the range by determining major support and resistance levels.

■ (↑) Long Trades

1. Wait until the price of an asset reaches an important support level.

2. Wait until there is a candle with a shadow below the support level and a close above the support level. This is called a falsebreak candle.

3. As the falsebreak candle is confirmed open a Long Trade.

■ (↓) Short Trades

1. Wait until the price of an asset reaches an important resistance level.

2. Wait until there is a candle with a shadow above the main resistance level and a close below the resistance level. This is also a falsebreak candle.

3. As the falsebreak candle is confirmed open a Short Trade.



TRADING ORDERS

■ Take Profit: 200-250 pips

The Take-Profit depends on the extend of the range between support and resistance. Take-Profit is placed 5-10 pips below the resistance in case of a Long-Trade and 5-10 pips above the support in case of a Short-Trade.

■ Stop-Loss: 80 pips

The stop-loss is placed below a falsebreak in case of a Long-Trade or above the falsebreak in case of a Short-Trade

■ Profit/Loss Ratio: 2.5


CHART: Falsebreak Candle Strategy

Trading Strategy using Support and Resistance Levels plus a Falsebreak Candle as a trigger


HotForex Security

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Falsebreak Candle Day-Trading Strategy

ForexExperts.net ©

THE STOCHASTIC TRADING STRATEGY

Day-Trading the Forex Majors using the Stochastic Oscillator and the Fibonacci Retracement


TRADING STRATEGY

Style: Day-Trade Strategy

Name: The Stochastic Day-Trading Strategy

FINANCIAL ASSETS

Forex Majors (Preferably EURUSD and GBPUSD)



TIMEFRAME

■ M5 time frame (5-Minutes)

■ 2-4 daily trades



INDICATORS & SETUP

This strategy combines the Stochastic with the Fibonacci Retracement

Stochastic Oscillator

-Settings at 5,3,3 instead of the standard setting (14,3,3)

Fibonacci Retracement

-Standard settings (.618, .500, .382 and 0.236)

 



TRADING SIGNALS

This is how you may implement the Stochastic Strategy:

■ First of all, we apply the Fibonacci levels and then we receive signals from the Stochastic.

1. Marking the narrowest crucial support and resistance levels in order to apply the Fibonacci retracement

2. After we receive signals from the Stochastic Oscillator

■ (↑) Long Trades

Each time EURUSD reaches an important Fibonacci level as support and the Stochastic is found at 20 and rising we enter a Short (Bearish) trade.

■ (↓) Short Trades

Each time EURUSD reaches an important Fibonacci level as resistance and the Stochastic is found at 80 and falling we enter a Short (Bearish) trade.



TRADING ORDERS

■ Take Profit: 40-50 pips

■ Stop-Loss: 15-20 pips

■ Profit/Loss Ratio: 2.5


CHART: The Stochastic Strategy (EURUSD)

Day-Trading the Forex Majors using the Stochastic Oscillator and the Fibonacci Retracement


 

EN_Demo_Account_980x120

 

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The Stochastic Day-Trading Strategy

ForexExperts.net ©

BOLLINGER-RSI DAY-TRADING STRATEGY

Trade the Forex majors by combining the Bollinger Bands and RSI


TRADING STRATEGY

Style: Day-Trading Strategy

Name: Bollinger-RSI Trading Strategy

FINANCIAL ASSETS

Forex Majors



TIMEFRAME

■ M5 timeframe (5-Minutes)

■ 5-7 daily trades



INDICATORS & SETUP

As the name of the strategy suggest we shall use two indicators, Bollinger Bands and RSI. This is an easy to implement trading strategy which may prove considerably profitable given the right market conditions.

Setting the Bollinger Bands and RSI:

Bollinger Bands

(i) 12 Periods instead of the standard 20 periods

(ii) Deviations 2

(iii) Shift 0

■ RSI

-The standard settings (14,9)



TRADING SIGNALS

This is how you may implement the Bollinger-RSI Day-Strategy which can also be used as a scalping strategy.

■ (↑) Long Trades

When EURUSD reaches the lower Bollinger Bands and RSI is found 30 or lower you execute a Long (bullish) trade.

■ (↓) Short Trades

When EURUSD reaches the upper Bollinger band and RSI is 70 or higher you execute a Short (bearish) trade.



TRADING ORDERS

Setting the Bollinger-RSI Scalping Strategy:

■ Take Profit: 50-70 pips

■ Stop-Loss: 20-25 pips

■ Profit/Loss Ratio: 2.5


CHART: Bollinger-RSI Day-Trading

Bollinger-RSI Scalping


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STRATEGIES: ► DAY-TRADE | ► SWING-TRADE | ► SCALPING STRATEGY | ► BINARY STRATEGIES

FOREX RATINGS: ► DIRECTORY | ► TRADE SPREADS | ► FOREX REBATES | ► FOREX SCALPING | ► SWAP RATES | ► FUNDS SAFETY

 

Bollinger-RSI Day-Trading Strategy

ForexExperts.net ©

Price Breakout Strategy

 

Breakout trading means entering a violent trend in its early stages. The aim of this strategy is to take advantage of a major price move, and to trade it by being exposed to limited downside risk.

 

What is a Breakout?

A breakout means that the price of an asset starts to moves outside a defined price level. This price level may be a support or resistance level, a channel, a trend line, a Fibonacci level, a pivot point and etc. Breakouts are important because as they are followed by strong price swings.

But be aware that most of the times, breakouts are false. However, there are times when breakouts are real and then your positions can be really profitable.

 

Types of Price Breakouts

Price breakouts, in general, are divided in continuation and reversal breakouts:

(i) Continuation breakouts

(ii) Reversal breakouts

Continuation breakout

In the case of a continuation breakout, the price of an asset breaks an established price level (usually previous high) and continues to trend. The goal is to take your profit near the next local high. The longer the accumulation of prices before the breakout the stronger the breakout shall be.

Reversal breakout

The goal of trading reversal breakouts is to spot the last stage of an existing trend. The end of a trend usually occurs when the price has reached overbought levels or it has been stopped by an important support or resistance level. The aim for breakout traders is to get in at the early stages of this new trend. The reversal breakout trading is very difficult to prove profitable for inexperienced traders. The vast majority of reversal signals prove false.

The problem of lack of volume data

Stock traders know well that when you are trading stocks, breakouts must be accompanied by significantly increased volume. The problem in the Forex market is that traders do not have access to aggregate volume data. This is a disadvantage for Forex breakout traders.

 

False Breakouts and Conspiracy Theories

In general, a false breakout occurs when the price of an asset crosses through a major support or resistance level, but then the price suddenly retreats back.

There are many theories that Institutional Players (large investment Banks) are behind these false breakouts in order to push their clients to their stop-loss orders and make easy money. In any case, a false breakout means that the market does not respond as traders have anticipated.

 

Techniques for Avoiding False Breakouts

There are many ways to avoid false breakouts and to filter your trades. The disadvantage of filtering your trades is that you shall get in later than other breakout traders. The advantage is that will avoid at least 60% of all the false breakouts.

Here are some tips to avoid False Breakouts:

BEFORE THE BREAKOUT OCCURS

(1) Seek for Volatility. Volatile markets provide much more reliable breakouts. You can use ATR indicator on MT4 (Average True Range) or you can use an online tool seeking for high recent volatility:

http://www.myfxbook.com/forex-market/volatility

(2) Check for potential price patterns or price formations that may be formed.

(3) Confirm the new price momentum using a momentum indicator (i.e. MACD)

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