#DayTradingStrategy Here’s a concise yet comprehensive **day trading strategy** that balances technical analysis, risk management, and discipline. This strategy is designed for liquid markets (e.g., stocks, forex, or futures) with clear volatility.
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### **1. Core Setup**
- **Timeframe**: 5-minute or 15-minute charts for entry/exit, with 1-hour for trend context.
- **Instruments**: Focus on high-liquidity assets (e.g., S&P 500 E-mini futures, major forex pairs, or large-cap stocks).
- **Session**: Trade during peak volatility (e.g., 9:30 AM–11:30 AM EST for US stocks, London/New York overlap for forex).
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### **2. Entry Rules**
#### **Trend-Following Strategy**
- **Trend Identification**:
- Price above 20 EMA + higher highs/lows = **Uptrend**.
- Price below 20 EMA + lower highs/lows = **Downtrend**.
- **Entry Trigger**:
- Pullback to 20 EMA or VWAP + confirmation (e.g., bullish/bearish candlestick pattern like pinbar, engulfing).
- **OR** Breakout of a tight consolidation (e.g., 1-2 candle tight range) with volume surge.
#### **Reversal Strategy (Counter-Trend)**
- **Setup**:
- Extreme overbought/oversold RSI (e.g., >70/<30) + divergence.
- Rejection at key S/R levels (e.g., previous day high/low).
- **Entry**: Wait for reversal candle (e.g., hammer, shooting star) + close beyond candle’s 50% mark.
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### **3. Exit Rules**
- **Take Profit**:
- 1:2 or 1:3 risk-reward ratio.
- Partial profit at 1:1 (e.g., close 50% position), let rest run to next S/R level.
- **Stop Loss**:
- Below recent swing low (long) / above swing high (short).
- Fixed % risk (e.g., 0.5–1% of capital per trade).