♞ Introduction to Day-Trading Strategies
Day-trading strategies are very popular among Forex traders as they offer the opportunity to generate quick and consistent profits on a daily basis. Day-traders use high capital leverage, which exposes them to elevated levels of market risk. They may trade any pair among the Forex majors (USD, EUR, JPY, CHF, CAD, AUD, NZD), but they tend to prefer three specific pairs—EURUSD, GBPUSD, and USDJPY—due to their tightest spreads in the market.
🛠 Characteristics of a Day-Trading Strategy
The following day-trading strategies are characterized by a high take profit/loss (P/L) ratio. The P/L ratio in day-trading strategies is significantly higher than in scalping strategies and may even exceed 2. In contrast to scalping, these strategies generate a much lower number of trades per day, typically between 3 and 6.
■ Daily Trades: 3 – 6 trades
■ Profit/Loss Ratio: 1.5 – 2.5
■ Leverage: 1:5 – 1:30
■ 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 with scalping, day-trading should be limited to low-cost trading opportunities. This means a Forex day-trader typically chooses to trade only the Forex majors. In the case of a metals day-trader, the focus is usually on Gold and Silver.
The trading cost of any day-traded asset can be reduced by joining a trading rebate plan: ► Online Forex Brokers
These are some trading strategies for day-traders.
♔ Day-Trading Strategies
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TRADING STRATEGIES |
ASSET AND TIMEFRAME |
INDICATORS |
TAKE PROFIT AND STOP-LOSS |
MORE INFO |
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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 |
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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 |
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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 |
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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 |
■ Day-Trading Strategies
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🔗 READ MORE
» Introduction to Trading Strategies
♞ DAY-TRADE STRATEGIES
» Falsebreak Candle
» Bollinger-RSI
» Stochastic Day-Trade
» Breakout Strategy
♚ SWING-TRADE STRATEGIES
» Riding the Trend
» Moving Envelopes
» MACD Swing
♜ SCALPING STRATEGIES
» Stochastic Scalper
» Bollinger-RSI Scalping
» Hit-Run Trading
♟ STRATEGIES FOR BEGINNERS
» News-Trading
» Follow-The-Trend
» Support and Resistance
» Fibonacci Retracements
» Stochastics Trading
» Chart Patterns
💱 MARKET CORRELATIONS
» US Yields and USDCHF
» Crude Oil and Forex
» USDJPY and US Stock Indices
» AUD and Gold Price Correlation
