Trading strategy

Trading strategy

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Article #1

Why do traders love simple trading strategies? The simplest day trading strategy is also the most flexible. Hence, a simple day trading strategy is a useful starting point for any day trader.

However, these might not be the best day trading strategy for you given your trading style. Why not create your own simple day trading strategy?

Create your own simple day trading strategy with the following template.

This simple day trading strategy template:

  • Covers the necessary parts of a robust trading strategy;
  • Uses no more than two trading indicators; and
  • Allows you to include your favorite tools.

Simply Trade the Trend Template

This is a basic template for trading intraday trends.

1. Find the trend

First, find the trend. Keep it simple and choose only one trend-following tool to help you.

Suggested trend tools:

  • Moving average sloping up or price crossing above moving average
  • MACD moving above zero line
  • ADX moving up above 25
  • Trend lines (HH, HL, or LH, LL)
  • Oscillator indicators with a long look-back period (including stochastics, CCI, RSI)

2. Define a retracement

Now, wait for the trend to slow down and retrace before trading it.

Jumping on a car while it is speeding can get you to your destination. It’s just a little challenging to find ways to do it without getting hurt. It’s the same for trading trends. We can hop on the trend while it is blazing away. The problem is with setting stop-loss orders to protect us.

This is not a problem if you are trading a long-term trend. However, day traders’ have limited profit potential within the day. Hence, we need precise stop-loss points to support our positive expectancy.

Remember our aim. Choose only one tool to help you with defining the retracement. If you can use the same tool you chose in first step, then you are a champion minimalist trader.

Suggested tools to define a retracement:

  1. Moving average
  2. Oscillator indicators
  3. Trend line break
  4. Break of an earlier swing low (for long trades) or swing high (for short trades)
  5. Price pattern like three-bar pullback

3. Entry and exit rules

A day trading strategy is never complete without specific entry and exit rules. You must know exactly when to enter a position and when to exit so that you can act without hesitation. These specific rules also help to define our reward-to-risk ratio for each trade.

To keep things simple, do not add another indicator. Use the indicators you have chosen from the earlier steps.

Suggested entry methods:

  • Bar patterns and candlestick patterns
  • Any bull trend bar
  • Oscillator turning direction
  • Close above moving average

Suggested exit methods:

  • Bar patterns and candlestick patterns
  • Previous extreme of trend
  • Oscillator turning direction
  • Measured move

An Example of A Simple Day Trading Strategy

  1. We use trend lines to connect swing points to define a trend.
  2. We need a trend line break before we start looking for continuation trades.
  3. We enter with a pin bar.
  4. We exit at the earlier extreme of the trend.

We used only one trading tool which is the trend line. No trading indicators. A simple price pattern for entry and a previous resistance for exit.


Article #2

Forex Trading Strategies

A good winning trader is defined by the portfolio of forex strategies known and applied in different situations, considering that a single system is not enough to supply the right number of successful trades if you apply it all the time. Knowing how to apply and adapt to all the market conditions is a key factor and this requires a lot of study and strong economics understatement, so is not just about the strategy you use, it's a lot about education also.

In order to come forward to your educational needs, our team has collected numerous resources on trading, ranging from basic ones that involve key principles of indicators and trend lines, to more complex and well developed that use certain advanced indicators like Aiken combined with fundamental factors.

Our collection is available to all users who want to develop their skills and know-how, knowing that on the long run the difference is made by ambition and education. All the information posted is for educational purpose only, and every strategy can be interpreted in a different way by each trader, concepts like money management and risk must be evaluated at every step. Also, our analysts usually test a new forex strategy for 6-8 months on demonstration environment before entering live trades, we advise you to do the same.

To make our library more accessible depending on the level of knowledge we have sorted our forex trading strategies in categories:


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