#DayTradingStrategy
Day Trading Strategy: Momentum & Reversal (Intraday)
Core Principle: Identify strong intraday trends and look for high-probability continuation or reversal points based on price action and key levels.
1. Setup & Tools:
* Chart: 5-minute or 15-minute for primary analysis; 1-minute for entry/exit.
* Indicators: Volume, VWAP (Volume Weighted Average Price), 9/20 EMA (Exponential Moving Averages).
* Watchlist: Liquid stocks/ETFs with average daily volume > 1M shares, or major forex pairs/indices.
2. Entry Triggers:
* Momentum Continuation:
* Price breaks above/below a significant intraday high/low with strong volume.
* Price bounces off VWAP or 9/20 EMA in the direction of the trend.
* Bull/bear flags or pennants resolving in trend direction.
* Reversal (Counter-Trend - Higher Risk):
* Price rejects a major daily/weekly support/resistance level.
* Divergence between price and momentum indicator (e.g., RSI, MACD).
* Exhaustion gaps or climactic volume spikes at extremes.
3. Risk Management (Crucial):
* Stop Loss: Always place a defined stop loss immediately upon entry. Typically just beyond the previous swing high/low or a key support/resistance level.
* Position Sizing: Risk no more than 0.5% - 1% of your trading capital per trade.
* Profit Targets:
* Fixed R-Multiple: Aim for 1.5x - 2x your risk (e.g., if $0.50 risk, target $0.75 - $1.00).
* Dynamic: Trail stop below/above key moving averages or previous swing points as trade progresses.
* Partial Profit Taking: Scale out at predefined targets to lock in gains.
4. Exit Strategy:
* Hit stop loss.
* Hit profit target.
* Loss of momentum, price breaking against the intended trend, or significant bearish/bullish candle formations.
* End of trading session (close all positions before market close to avoid overnight risk).
5. Discipline & Review:
* No FOMO: Stick to your plan; avoid impulsive trades.
* Journal Everything: Record entries, exits, reasons, emotions, and lessons learned.
* Review Daily: Analyze winning and losing trades to refine your edge.