This trading strategy is a simple approach to trading that does not require a lot of subjective trading analysis.
Newer traders looking for some place to start or experienced traders who’ve put on too many variables for a trade, should find this a good starting point for simplicity.
The moving averages are designed to give an objective trend direction while the RSI is designed to show us the balance of buyers and sellers.
We will use the following indicator settings:
We all make them.
If you day trade, just by the sheer number of trades that you’re likely to take over time, you will make many trading mistakes.
People new to trading are particularly prone to mistakes. They might not be fully competent with their software or not understand the potential consequences of trading outside of their trade plan for example.
Although mistakes are far less common for more experienced traders, they are not immune from making them.
I’m not sure that many people would…
The Three (3) Black Crows trading pattern is a bearish reversal candlestick pattern that appears in an uptrend.
Many traders use it as the name suggests which is a huge mistake.
If you simply sell when the pattern appears, you are looking at amassing a large amount of losing trades.
This pattern, by itself, is missing one important thing you need to know before taking a trade.
We will cover that later.
Let’s discuss what this pattern looks like
We are looking for 3 bearish candlesticks with lower opens…
The Parabolic Sar (stop and reverse indicator) by J. Welles Wilder, is a trading indicator that can be used for a few purposes:
The “stop and reverse” feature as shown by a series of dots above and below price, is designed for traders that are always either long or short in the market.
The Relative Strength Index by J. Welles Wilder is one of the most popular technical indicators being used.
The RSI compares the strength of up days to the strength of down days and with that calculation, we can determine if the momentum taking place is either bullish or bearish (consider lack of momentum as well).
It then plots at value between 0 and 100 making it a bounded indicator.
The most common settings that traders tend to watch are:
Trading support and resistance levels is a common approach to trading.
Whether it’s a viable strategy is another question and much of that will depend on the trader.
One of the biggest issues with support and resistance is defining price levels that actually mean something.
Support levels are where price is expected to cease declining and then resume moving upwards.
Resistance levels are where price is expected to stop climbing and then reverse downwards.
Support and resistance levels are estimates and not necessarily…
The Fisher Transform indicator was created by John F. Ehlers and is not a highly popular trading indicator.
When applied to your chart, it looks much like the standard Stochastics Oscillator and the MACD indicator. It has two lines, the trigger and the Fisher line, as well as 5 horizontal lines:
There are numbers that are higher and lower than the ones with the horizontal lines.
The indicator shows when prices have reached an extreme where many traders look for potential price reversals. …
Most successful traders begin their trading day with some type of pre-market routine. In fact, most successful people will tell you that one secret to success is having a routine.
Getting up to day trade five minutes before the opening bell may be a routine, but it probably isn’t the most successful
Day trading can be a stressful way to make money, keep any profit you make and traders should have a “trading preparation” checklist as they come into their trading day.
But if you want…
Trends lines have always been a popular way for technical traders to define support and resistance levels in all markets. The key to being able to use a trend line efficiently is to ensure you have a rules based method to draw them consistently.
Trend lines are levels used in technical analysis to represent either support or resistance, depending on the direction of the trend. They are analogous to horizontal support and resistance.
Markets go up, down, sideways and when a market is trending, looking at…
Using everything from price action and volume, to technical indicators and news, there are many ways to piece together a trading strategy that could be viable.
In this article, I am going to show you how to use the following moving averages to design a trading system:
What we have are two short term averages that are good for swing traders and the longer term trend following 200 period moving average.