Sample Day Trading Strategies


Day Trading is a tough profession. Only those who are willing to use their brains and do their own share of hard work will succeed in this niche.

There is an old saying – a bad workman always blames his tools. We day traders are bad workmen. We do not look at the right direction and yet we crave for success in this niche.

Listed below are some sample strategies that should help you survive in the fast moving world of day trading.

Strategy I

Most of the day traders will be already aware of Camarilla Equations. I have even dedicated two posts in this blog for the same set of equations.

Replace the high price and low price of the equation with the current trading session’s high and low price. Replace the close price with the mean value of the day i.e. (high+low)/2. Watch the magic unfold before your eyes.

Strategy II

It is actually something similar to strategy I. However, this time we will consider the floor pivot points. As mentioned earlier, use the mean value as the close price while considering the high and low price for the current trading session. Once again, you will be surprised by how the market follows the method.

Strategy III

This method is particular useful when you are trading the nifty futures contracts or similar instruments rather than the currency markets.

I take into account the Indian markets while demonstrating this method. Wait for five minutes once the market opens. At about 9:20am, take the high and low price. Then take the average of these two. You will obtain a value. Note that value. Throughout the rest of the trading session, you will find that this particular value will act as a pivot. It is powerful enough to determine the actual trend of the market. If the market is playing above this value then we are in a strong bullish trend. When we are playing below this value, then the market is clearly bearish. Develop suitable strategies involving this value – I know plenty of people who are making serious money by following this method in particular. It is alternatively termed as Directional Day Filter.

Strategy IV

This is not my invention – but I am directly listing the post that inspired me to start looking for the truth! The idea is to replace the closing price with yesterday’s opening price in the floor pivot formula. Likewise, you can experiment with today’s opening price (replace the closing price in the floor pivot formula with today’s opening price). The author of the post, one Mr.Lefty seems to be an accomplished day trader – I went through his posts in that forum, and most of them make complete sense to me rather than the blatant sayings of the Indians (which you may come across in desi forums such as Mudraa.com. traderji.com and inditraders.com).

Strategy V

An accomplished day trader often used to quote something to me very occasionally. It goes like this – consider the market as a small pool of water that is in a complete standstill. If we throw a stone into this pool, it causes ripples. Likewise, the first ripple for any day is caused by the opening price. This chap often asked to me “learn to trade the opening price”. Although he has not yet revealed how he does the same, I think I have some working notion of what he meant.

We have three definite parameters for any trading day. They are the opening price, the high price and the low price. Take the average of the high / open along with the average of low / open. I mean (high+open)/2 and (low+open)/2. Always consider (high+open)/2 if the current price is trading above the opening price. In the same manner, consider (low+open)/2 if the current price is trading below the opening price. I also use Fibonacci extensions and retracements to come up with entry and exit points for this method. But that is for you to find out.

Please bear in mind that any day trading method should not be considered as the holy grail. If it existed, then I would not be posting those as ‘strategies’ over here. As with anything else that is remotely related to day trading, the returns will be directional proportional to the amount of time you take to analyze and study it. I know it is tough, but that is the entire nature of this business.

Likewise, I would also like to reiterate that the truth is out there, right in front of your eyes. Most of the traders fail to look into the obvious and keep on searching for that holy grail. I am penning these methods just to make the fellow traders think.

to be continued

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