Day Trading Strategies

What type of trading strategy do you use?

 

Our trading strategy can be applied to both long and short term trading, Futures, Stocks, Crypto, Bitcoin, and Forex, but our focus at SOT is for ‘short term’ futures trading for many reasons:

 

Short term trading allows traders to use small amounts of risk and earn a quick, reliable reward without the need to manage an open position for weeks or months at a time. They appreciate being ‘flat’ at the end of the day with the money back in their account to avoid overnight volatility.

 

The Futures markets provide traders with a regulated, on-exchange, leveraged, liquid, tax efficient, and low cost trading environment compared to stocks, Forex, and other financial instruments.

 

Crude Oil is one of our favorites because its market personality and daily volatility is a great compliment to our short-term trading strategy in our trade room.  We can easily define the trend, find the targets, and then find 3-8 reliable trading opportunities every day we trade.  It’s hard to want to change anything, it’s the best of all the options!

 

We use a combination of technical analysis, risk management, market psychology, and emotional discipline to find the most reliable opportunities each day we trade.

 

The average trade usually lasts between 3-10 minutes, and uses a strict 3% risk tolerance to ensure that traders protect their capital at all times.

 

We teach everything you need to know about our trading strategy in the Advanced Membership Course.

 

What if your strategy doesn’t match my trading style?

 

The best part about our day trading strategy is that it can be applied to all different markets, different timeframes, and trading styles.

 

Our students learn how to use technical analysis to identify reliable trading opportunities, and they can apply the knowledge and skills they learn to anything they want.

 

For example, we have students who will learn our strategy for day trading Crude Oil Futures, and then apply the same techniques to trading Oil Stock ETFs for long-term investing.

 

The knowledge of what we call the ‘Price-Action Cycle’ is priceless, and can be applied to all markets and all timeframes.

 

What chart timeframes do you use? Do you trade with multiple timeframes?

 

We keep it simple, and use only one time-frame per market, and we prefer to trade one market at a time.

 

We believe that new traders should focus on one market and one time-frame while they learn.

 

Every market has a different ‘personality’ that needs to be understood, and most new traders make the mistake of trying to learn multiple markets and use too many different chart time frames at the same time.

 

Our day trading strategy will usually easily identify between 3-8 trade set-ups each day for each market, so you don’t need to use multiple charts or multiple markets to become consistently profitable.

 

 

My favorite chart types are ‘volume’ and ‘tick’ charts because they provide plenty of reliable trading opportunities without a lot of risk.

 

With ‘volume’ and ‘tick’ charts I see the most important information needed to make trading decisions, and the size (range) of each candlestick is usually small enough to use a 10-tick stop which keeps risk to a minimum.

 

Although ‘time’ charts (such as a 1-min or 5-min) will work, you will see few candlesticks on the chart, and the candlesticks tend to be larger (range) which requires you to use a larger stop-loss and thus requires more risk on each trade.

 

Again, I can use any chart type and chart timeframe that I want with this, but if I had to choose, I would choose the ‘volume’ and ‘tick’ charts because they provide plenty of trading opportunities without the need to risk more than 10-ticks on each trade.

 

Does your trading strategy use any technical indicators?

 

Yes, we use a small handful of technical indicators in our trading strategy.

 

•         Moving-average

•         Entry-Counter (custom-built for SOT members)

•         Measurement Tools

•         Drawing Tools

 

As you can see, we don’t use any complicated tools, and our main indicator is a moving-average, which is used to gauge market strength, and also used as support and resistance.  There are more details in the educational course on the specifics of this.

 

We also use the ‘entry count’ and ‘measurement’ tools to help identify the proper timing of entries and to make sure we have enough room for each trade, and we have a suite of custom drawing tools that help us with our technical analysis.

 

Keep in mind, we don’t rely on technical indicators to find trading opportunities, we rely on our strategy to define ‘situations’ where the odds are stacked on our side of the market to enter a trade.

 

As we always say… “we don’t trade signals, we trade situations”

 

Our main focus is to use the moving-average along with trend lines, channels, and trading-ranges to identify the trend, and find reliable trading opportunities that follow the trend.

 

As you can assume, our video education course will teach you everything you need to know about using our indicators, and we use them in our Trade-Room so you can learn the correct way to use them by watching Joseph.

 

How many trades do you take each day?

 

Each day is different, we take what the market offers us, but on average we find between 3-5 trading opportunities each day, with the focus on quality over quantity.

 

The best traders in the world are patient and selective with which trades they take.  Experienced traders know that over-trading rarely produces the desired results.

 

We firmly believe that 20% of the trades earn 80% of the profit for most traders, which means that new traders should trade LESS often because they need to learn how to be patient to wait for the times when they have an ‘edge’ in the market and can enter trades with considerably more reward than risk.

 

Our goal is to identify 3-5 reliable trading opportunities every day so our members can grow the balance of their trade accounts, and then use those profits to trade larger position sizes in the future, earning more profits without changing the way they trade the strategy.

 

We encourage you to take our FREE TRIAL to see examples of this.

 

What is the risk to reward ratio on your trades?

 

Managing risk and keeping things simple are the most important aspects of a successful trading career, which is why our traders use a 1:2 (or greater) risk to reward ratio, which means they never risk more than they expect as a reward, and their winning trades earn them MORE than their losses cost them.

 

By using a 1:2 (or greater) risk to reward ratio, it ensures that our students do not need to be perfect.  Our goal is to provide our students with a trading strategy that will allow for losses while producing profitable long-term results.

 

 

We like to trade the 618-tick chart of Crude Oil and use a 10-tick stop with two profit targets.

 

The first target is +10ticks, and the second target is placed at the next level of support and resistance.

 

Will this trading strategy work in all types of market conditions, even choppy,  sideways ranges?

 

Yes, our day trading strategy works well in all market conditions because we have a strategy for ‘trending days’, as well as, ‘range days’.

 

While every trading day is slightly different, every day will fall into one of two categories; the market is either trending, or it is trading inside a sideways range.

 

The first thing we do each morning @ 8:00am EST in our trade room is define the market conditions for that day.

 

 

If the market is trending, we focus on following that trend with pullbacks, failures, strength, and traps.

 

When the market is trending, we never trade against the trend, and we have a very simple way of using the moving-average and market psychology to define when the trend has changed so we’re always going in the right direction.

 

We use trend-channels, measured-moves, and many other simple techniques to identify targets, and we resist the temptation to go against the trend.

 

 

If the market is trading inside a range, we change our focus to buying low, selling high, avoiding the middle, focusing on failures, and using the ‘pendulum swing’.

 

Ranges come with either double-tops and double-bottoms or in the form of a ‘wedge’ or ‘triangle’ on the chart.  Once we see these on the chart then we switch our strategy to trading within that range.

 

Not to worry, you will learn how to properly define both ‘trending’ and ‘range bound’ scenarios in our Intermediate and Advanced Courses at SOT.

 

We encourage you to take our FREE TRIAL to see examples of this.

 

Can your trading strategy be used on Stocks/Equities, Cryptocurrencies, Forex, or for Swing Trading?

 

Yes, our trading strategy is built on a firm understanding of crowd psychology and human emotions of fear and greed, which can be applied to any liquid financial market where people are trading for a profit.

 

With that said, we can apply our trading strategy to any market, using any time-frame that we chose.

 

With a few small changes to chart time-frame we can adapt our short-term strategy to a more long-term strategy that can be applied to any liquid market around the world.

 

Furthermore, the same strategy can be used to trade Crude Oil Futures, stocks, forex, CFDs, any liquid markets where technical analysis and human beings are involved.

 

What are the essential elements of your trading education and strategy?

 

We believe that a successful trader must possess a combination of both technical and mental skills to be able to deal with today’s challenging markets.

 

It is not enough to simply know how to trade, you must have the mental focus to be able to follow rules in the heat of the battle, so we spend considerable time on trader psychology and building the discipline to wait for the proper time to enter the trade.

 

We begin in our Beginner Course, by teaching our students how to use a computer & trading software effectively for a professional trading career.

 

In our Intermediate Course, we then move to teaching the student how to CORRECTLY use technical analysis.  When done correctly, technical analysis allows us to define trading opportunities where we have the ‘edge’ we need over the rest of the traders in the market.

 

Once we find our ‘edge’, then we move to finding trade set-ups and entry triggers in our Advanced Course.

 

We use a ‘trade set-up’ to tell us when to be looking for the entry, and we have well-defined ‘triggers’ for each trade with small risk and large reward situations.

 

We then focus on trade-management, which is easily one of the most important pieces of the trading puzzle. Proper trade management seeks to remove risk quickly, lock in a small reward, and hold a portion of the position for the medium-term in order to capitalize on the larger moves in the market.

 

Lastly, and arguably most importantly, is our focus on discipline and patience to wait for the proper time to enter and exit the market.  There is no room for emotions in trading, and we spend considerable time working on developing the patience to wait for the correct time to get into the next trade, while leaving trades open until they achieve their profit potential.

 

Is your average student successful with your trading education and strategy?

 

While individual results will vary, our average student is consistently profitable when they invest their time to learn our trading strategy and execute the strategy correctly with the proper attention to managing risk and reward.

 

Our goal is to provide the highest level of quality product, service and support to all of our clients, and we have helped thousands of students become successful professional traders since 2008, when we opened SchoolOfTrade.

 

For more information, please contact our office: