Okay peeps,
I guess since I’m showing some basic concepts in terms of swing trading, then I should also show some short term day trading techniques that use the same principles and tools.
Now this is the most simplest of day trading techniques and its pretty much an off-spin of the higher time frame methods, the only difference is we will use is the 15 minute 60EMA & 200SMA & RSI(5), the 100 SMA is not used neither are the 1 hour, 4 hour or daily time frames.
When I say this is simple, I mean it, there is nothing much to it, but yet this little simple strategy churns out pretty low risk small but consistent profits time over time.
I want you to visualize that your job is to trade the 15 minute 200SMA everyday, nothing else, you wake up in the morning, load up your charts, and your only mission in your trading career is to trade the 15 minute 200SMA with your only bias being, is the 60EMA and price above or below the 15 minute 200SMA. You have no other care or bias towards the market, do you think you could do that?
If the 60EMA and price are above the 200SMA, then you want to BUY the the 200SMA if the RSI is oversold.
We don’t wait for a candle close, or a candle pattern or an indicator to turn or anything else, the algos BUY at market there and then and then exit after a few pips.
If the 60EMA and price is trading below the 200SMA, then you want to SELL the 200SMA if the RSI is overbought.
Now not every attempt on the 200SMA is trade, even if the the 60EMA and price is above the 200SMA and the RSI is oversold and price slaps the 200SMA. If we can see the 60EMA declining sharply or at least very close to the 200SMA and pointing downwards, then its best to cool-off and sit it out, as this tends to lead to consolidation, or reversal in trend. Reverse for non selling trades.
Now when you do BUY OR SELL the 200SMA based on the guide above, then you should place an automatic stop loss of 21 pips. Your obvious objective is to at least achieve a 21 pip target goal, but trail the stop as the trade progresses and you will often catch double, triple even quadruple the risk.
One last thing on this simple little strategy, if after entry price does bounce of the 200SMA but a few candles later it moves the other way and closes above/below the 15 minute 200SMA, don’t be afraid to close out the trade early and take a lower loss than the stop would provide. Just cut the loss short and try to let the winners run by trailing the stop.
CLEAR SET-UPS
TRADES YOU AVOID
Just like anything else, trading carries risk, and this system is no different. Loses will occur, so control risk and use proper money management when applying this or another system.
