What Is The Best Day Trading Strategy?
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3 Non-correlated indicators produces better signals
Follow this link to a feature article about the advantages of Tick Charts. Getting the trend direction right is critical. If you get the trend direction right, you can still make a lot of mistakes like a poor entry and still be OK. But if you get the trend direction wrong, making a profitable trade will seem like hard work, stressful and take forever. I use Exhaustion buying and selling volume signals from the Better Momentum indicator in my intermediate time frame chart 1, tick to determine trend direction.
To confirm a change in trend I look for 3 things:. My 3 non-correlated indicators are all confirming the same thing by analyzing different information — price, volume and trade size. This gives me high confidence that a trend change is approaching and an Emini day trade signal is setting up. Then use the lowest time frame chart tick to pick the entry point. These days TradeStation is still the best choice for me — particularly because their data feed is in-built and simplifies life considerably.
For some reason people think of TradeStation as a professionals-only platform. Although I use TradeStation for charting, I do not use them as my broker. I no longer worry about getting a good fill and the exit orders are sitting there, server-side. As short term traders, we need to be confident that every trade we take has a statistical probability of working out in our favor.
The following is a list of 3 things we look for when day trading e-mini futures. If you want a sure-fire way to stack the odds against you, then try and pick when a trend is going to end.
There are many indicators that give hints to when a trend may be coming to an end, but statistically they are wrong more than they are right.
While divergence can be a pattern to keep a close eye on, it does not confirm that a trend has ended. In the chart below we are in an uptrend followed by two times of MACD bearish divergence.
It does not mean that any selling pressure has come into the market. Until there is a clear indication that the trend has broken to the downside, the probabilities say that the uptrend is likely to continue. Notice that the divergence pushes price back to the support level at A good example of this is to get in on a pull back to an area in anticipation that the trend will continue in the original direction.
I decided to use my scalping strategy "The Seahawk Strategy". I openly admit it: The Seahawk Strategy is not sexy. As a scalping strategy, it uses a larger profit target than stop loss. At first this seems to be couter-intuitive, but you need to know that there's a strong relationship between the reward-to-risk ratio and the winning percentage.
The higher the reward-to-risk ratio, the lower the winning percentage and vice versa. Using the Seahawk Strategy I knew that I could only extract small profits from the market, but since there was no trend, that's all I could do. You have to take what the market is willing to give you. Watch the recording of the Live Trading Challenge to see if it worked out for me. Therefore you MUST have multiple trading strategies. At a minimum you should have two 2 day trading strategies: One for a sideways market and one for a trending market.