For this it has been given the very catchy name of the Day Trade Trending Strategy. While I have called it a day trading strategy, it can actually be utilized on any time frame, as the set-ups are the same across a 1 minute chart, 1 hour chart or daily chart. I use a very similar method for swing trading forex using daily or 4-hour charts.

Before I begin, I cannot stress enough the importance of patience when employing the strategy.

Like a fighter honing his striking skills, it is all for not if the blows are delivered at the wrong time. The following day trading strategy will provide roughly sometimes a bit more, sometimes a bit less trades per day.

Some days will turn out to be ranging days. Use patience and restraint.

I have other strategies I use during the first half hour see: Stop is just above recent swing high in a downtrend and is usually fairly small. In the first trade first red arrow , the high is I would exit if the prices gets back there.

I do not wait for bars to complete, bars are arbitrary. I only care what is happening in real-time. In this case the former low was Since we are in a downtrend I assume that low will be broken by some amount. The amount I assume it will be broken by at least is my stop. If someone uses a slightly a different entry method, then this method may not work for them. I place my profit target order and it is hit. Profit is about 2. Another swing low occurs and then the market pulls up again toward the trendline.

I do the same thing again for the second trade.

This time the reward is about 2: Two trades to three trades is normally all we get in an intra-day trend, unless there is a very strong trend occurring that day. If the market continues to make lower lows and lower highs, great, we may get a couple more in.

But this is pretty rare before we see a larger correction against the trend.

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If it looks choppy I stay out — this often occurs between 11 and 1 ET. The horizontal line marks the low of day so far. After lunch that low is broken near I repeat my process.

On the following correction it makes a higher low, thus giving us a potential entry, but the bars are big at the turning point this may be hard to see, but the stop is about cents as the entry was harder to pinpoint. The market does not really recover then makes a lower low followed by a lower high.

My target is hit. BUT, this is actually not a trade based on this strategy.

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Can you see the difference between this and the others? If you can, then it is likely you understand the strategy.

It is actually the next price wave which should be our entry — and it would have resulted in a loss. That entry is between the second red arrow and first green arrow and I would have been stopped out. Having 4 trades in a move like this is rare. After 2 trades, the odds begin to decline; a losing trade becomes more likely as the trend is reaching extremes….

Get your copy today. Day Trade Trending Strategy — Look for this when day trading Posted on January 9, by Cory Mitchell, CMT. Day Trade Trending Strategy — When and How The following day trading strategy will provide roughly sometimes a bit more, sometimes a bit less trades per day. Day Trade Trending Strategy — Examples and Guidelines Here is how the first couple trades of the day may look: We start out the day in a choppy fashion but then about an hour in we break the lows of the day.

We can now draw our downward trendline because we have broken lows and eventually we want to go short. We then wait for a pullback towards the trendline Please note, the trendline is only a visual, but really has no significance to me. What matters, in this case, is that all the future swing highs in this move stay below the most recent swing high and new lows are created. As long as that happens, it is a downtrend.

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Opposite applies to an uptrend. For more, see How to Use Trendlines—Dispelling the Myths. Enter short using same criteria as before. Day Trading Trending Strategy NOTES: My turning points are somewhat subjective. Each situation is slightly different. Basically I am just looking for a shift from buying to selling or vice-versa near what I believe should a turning point a correction in a larger trend, ie.

Like I mentioned the trendline is not too important, it is just a visual. Usually only make 1 or 2 trades in each move.

Not picking tops or bottoms. Then basically I am waiting to get in at a low risk entry point in that emerging trend. Those with a basic understanding of Elliott Wave Theory will see that this simple trending method is basically designed to capture waves 3 and 5 of a trend —and there may potentially be a couple trades in each of these waves.

If there is any question as to the current trend I do not trade this strategy. For example, a lower low is created then a higher swing high is created.

In this case back off, and let a trend develop.

SPY may not be best place for this strategy, rather I will trade another stock or ETF. In an uptrend I trade stocks or ETFs that are relatively strong and the market leaders. This usually provides smaller stop trades and more reward. In a futures downtrend I trade stocks or ETFs that are relatively weak to the market laggards for the same reasons mentioned above. If the market is pretty close to my profit target and starts to pull away, I exit. I am not going to risk giving up a bunch of profit for a couple cents.

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