Half the battle can be won before it even starts by first figuring out what direction the market is moving at the beginning of your trading day. Is it bullish with candlesticks trading above the MA’s, or is it bearish, trading below them? Sometimes this can be difficult to determine when the market first opens, but it is one of the most important day trading strategies so you want to do it as soon as it’s possible.
While it can take some time to establish which side of the moving averages candlesticks will be clustered, sometimes a good pre-market analysis can give helpful clues ahead of time. Daryl recommends starting with the higher time frame charts to determine direction as the slower time frame charts will often catch up with them.
To determine market direction, look at two things. 1. How the moving averages (MA’s) are stacked, and 2. where the candlesticks are trading in relation to them. For example, if the 11MA is above the 21MA and both are above the 50MA, this is considered bullish (while the opposite is bearish). When the candlesticks are trading above the MA’s, this is also considered bullish; when trading below the MA’s, this bearish.
A good day trading strategy rule of thumb is this… Steer clear of trades going against the direction of the market. If you’re above the MA stack, don’t take puts, especially if it’s a trend up day. If you’re below the stack, avoid the calls, especially if it’s a down trending day. Of course there’s exceptions (like market-wide pivots), but in general this advice will save your account.
The right day trading strategies can definitely add an edge to your game, while also protecting your account. Knowing which trades are higher risk and why will keep you playing longer and profiting consistently. This is the type of information we teach in our Limitless Volume day trading coaching program! For more info, contact us or sign up for our no obligation 7-day FREE trial to see for yourself.
