Day Trading Strategy

 Hello and welcome back to this blog. My name is Umesh Gupta, and I have been a seasoned trader for decades. In today's Blog, I'm excited to share what I believe to be the unbeatable day trading strategy that will accelerate your journey toward profitable trading. The strategy I'm about to unveil relies on two different time frames, and each one has a crucial role to play in guiding your buying and selling decisions. It's not just about when to buy or sell but also where to do it. Let's get into the nitty-gritty by looking at the British pound versus South African rand currency pair.

On this chart, you will spot the EMA 50 highlighted in a cool purple color. The secret sauce in this strategy lies in closely watching how the price interacts with EMA 50, which is the exponential moving average with a 50-day period. Here's the deal: we are on the lookout for the price to consistently trade above the EMA 50 line. When that happens, it's a sign that the price is regularly making higher highs and the pullback is making higher lows on the chart, which are classic indicators of an uptrend. But, and here is a big "but," if the price isn't showing those clear higher highs and higher lows patterns, I strongly advise against jumping into the trades. Instead, I would recommend being patient and waiting until the price consistently follows those patterns. By doing that, you are stacking the odds in your favor and increasing your chances of spotting a golden opportunity to make those smart buying or selling decisions.

Now, let's elaborate more on this strategy. So, stay tuned and let's dive into this strategy together.

In this graph, you see how the price is trending nicely, making higher highs and higher lows all the way up. Each higher high is higher than the previous one, and each higher low is also higher than the previous one. This is the characteristic of a strong uptrend. When we see the price on such an uptrend with higher highs and higher lows patterns, the prime spot to set up our buy order is right where the higher lows are pointing upward. That's the sweet spot. Consequently, if you do not observe these key trends and instead witness price stagnation or consolidation, exercise caution and refrain from trading. Patience is crucial in waiting for the next opportunity to execute your strategy.

Now, I know which direction I want to place a buy trade, and I know where I'm looking for these buy trade entries. For this strategy, there is only one place to enter a buy trade, and that's why this strategy is so reliable for beginners and struggling traders.

Now, let's go back to the first trading slide to elaborate more on this.

In this slide, I draw my resistance level using my previous higher high and where this resistance turns into support. This is resistance because the trend is going up, hits this area, and then comes back. So, this acts as a resistance. And with this resistance, if you follow this, it turns into support at this location, at the next higher lows. That is the area where I am looking for the price pointing upward in order to place a possible buy trade. So, this is what I call a buy zone. If you draw your resistance at this resistance level at this higher high and if you follow at this location, this resistance level turned into support, and this is another possible buy entry. So, at this moment when the price enters the buy zone, let's say at this location, I use the second time frame, which is the M30 instead of the 4H time frame I mentioned earlier. Let's look for two specific chart patterns at this location.

At this location, I wait for the price to break the neckline and close above the neckline, and that would be my actual entry. I will explain thoroughly in detail in my next slide. Let's go back to our initial British pound versus South African rand currency pair.

Now, I have a clear uptrend direction for placing a buy trade. I focus on identifying the optimal entry point within the uptrend. As you can see, this is a nice uptrend. This strategy offers a single highly reliable entry point, making it ideal for both beginners and struggling day traders.

In this trending scenario, the price is making higher highs, and also the pullback is making higher lows, which is a sign of an uptrend. And the price is consistently above the EMA 50, as you can see. The price is above the EMA 50. To locate my entry point, I draw my resistance area using the previous higher high. I'm using this in order to make the resistance level. And this is my resistance level. You can see the price is going up, hitting that resistance level and bouncing back.

If you go on this resistance level, if you follow this, you see this resistance level at this point. It turned into support. You see the price coming down, hitting the support area and bouncing back. And when the resistance transition turned into support at this subsequent higher lows, at the subsequent higher lows, that becomes the key zone for potential buy trade entries, as illustrated in the chart. When the price penetrates into the previous resistance, now turned into support, the next step is to use the second time frame that I mentioned earlier for this strategy, which is the M30 or 30-minute chart, to find where my precise entry point is.

Look here, the price enters here, and then after that, we have this pin bar, and there's another candle that closes almost on the upper level or upper band of this resistance or this support level, and then this one. So, you don't know exactly where you have to enter the trade, so I am going to go to a lower time frame to find the precise entry.

Look, this candle penetrates into my support at this time, 10th of August, 1 pm. So next, I'm going to show you where I am going to buy using the 30-minute time frame, as I mentioned earlier. Let's break down the time frames I use for this strategy.

First, we have got the 4-hour chart, also known as H4 time frame. Now, on this chart, my main focus is identifying the trend's direction. Is it heading upward or downward? This decision determines whether I want to be a buyer or a seller. In this particular case, since the trend is pointing upward, I am inclined to be a buyer.

The next big question is: where do I make my move on the 4-hour chart? On this 4-hour chart, once I have identified that, I drop down to the 30-minute chart. Now, on this M30 chart, my eagle eye is scanning for two specific chart patterns: the double bottom chart pattern or the inverted head and shoulders chart pattern. In this zone, I wait for the price to break the neckline and close above the neckline, and that would be my actual entry.

Let me show you the location of the candle that penetrates into the support on August 10th at 1 pm in the 4-hour chart time frame.

In this chart, it is right here, at this candle. You see, that is the 10th of August, 1 pm. You see, afterward, first of all, this candle is below the EMA 50, and it's coming down, making the first bottom, going up, making the neckline, and again, bouncing back to make the second bottom and heading upward. Afterward, the trend is going upward. So, as you see, after the trend is going higher and higher, now I entered the trade as soon as the candle broke the neckline and closed above the neckline. So, I entered the trade here.

Now, let's talk about risk management, a crucial aspect of any trading strategy. To set my stop loss, I place it at two times the ATR below the close price of this candle for a stop loss, and I put three to four ATR above the close price of the candle for profit target. This way, it helps me protect my capital while maximizing potential gain, and I also have a two-to-one reward-risk ratio.

Next, I'm going to talk about a sell trade strategy.

This is the Euro Canadian currency pair. On this chart, you will spot the EMA 50 indicated with a purple color. The secret in this strategy lies in closely watching how the price interacts with the EMA 50, which is the exponential moving average with a 50-day period. On this chart, we are looking for the price to consistently trade below the EMA 50 line. When that happens, it is a sign that the price is regularly making lower lows, and the pullback is making lower highs all the way down, which is a classic indication of a downtrend.

Now that I have a clear downtrend direction for placing a sell trade, I focus on identifying the optimal entry point within the downtrend. This strategy offers a single highly reliable entry point. Now that we are certain of the trend being a downtrend and the price consistently below the EMA 50, the next step is to locate my entry point.

I draw my support area using previous lower lows, which is right here. And when this support transitions to resistant at this location, a subsequent lower high location, so this is going to be my sell area, and this is going to be at this location. It's becoming a resistant area. Here, it's support because the price is coming to support and bouncing back, and here, the trend is going toward the resistance and bouncing back.

As illustrated in this chart, when the price penetrates into the previous support, now turned resistant, the next step is to use the second time frame I mentioned earlier for this strategy, which is here. I'm going to use M15 to find where my precise entry point is. So, in my next chart, I am going to show you where I'm going to place my sell trade using the 15-minute time frame.

Let me break down the two time frames I use in this sell trade strategy for you. First, we have got the 4-hour chart, also known as H4 time frame. Now, on this 4-hour chart, my main focus is identifying the trend's direction. Is it heading up or down? This decision determines whether I want to be a buyer or a seller. In this particular case, since the trend is pointing downward, I am going to be a seller.

The next big question is: where do I make my move on the 4-hour chart? Once I have identified that, I drop down to the day trading time frame, which is the M15 chart. On my next slide, I am going to show you how to enter the sell trade using the M15 chart.

This is the Euro Canadian chart on the 15-minute time frame. On this chart, my eyes are scanning for two specific chart patterns: the double top or the head and shoulder pattern. These are the only two setups that will get me into a sell zone or sell trade. As you can see in this chart, I have got the head and shoulders chart pattern, and this is the neckline or the sell zone. As soon as the price breaks this zone and closes below it with this big bearish candle, I press my sell button and decide to place a sell trade. As you can see, afterward, the price is heading downward all the way.

Now, let's talk about risk management, which is a crucial aspect of any trading strategy. To set my stop loss, I place it 2 or 3 ATR above the close price of this bearish candle for a stop loss, and 3 to 4 ATR or 5 ATR below the close price of this bearish candle for profit target. So, this is my stop loss, and this is going to be my profit target. This way, it will help me protect my capital while maximizing potential gain.

This is the Euro Canadian chart on the 15-minute time frame. To effectively establish your stop loss and profit target levels, it is advisable to consolidate more data onto one screen. Utilize the average high and low point from previous data to determine suitable levels. I recommend trying out this trading strategy, which I personally employ. When implemented correctly, it can lead to substantial profits. Feel free to share your results in the comments section.

I hope you find this Blog helpful, and I wish all of you the best of luck. Don't forget to hit the subscribe button to receive timely updates on future content. That's all, folks! If you liked this Blog, thumbs up and subscribe. Thanks for watching, take care, and see you next time!

Contact Information:

Phone: +91-8976345801 - Whatsapp only

Joined the WhatsApp group by clicking  https://chat.whatsapp.com/H9czlfIghZHDdwSXuDzyOt