Simple tutorial for day trading

All indicators in the form of MACD’s, stochastics, RSI, Gann, Elliot Waves, etc are completely useless to your trading. Forget the whole lot and ignore them. At best they distract you from what only matters (price) at worse they make you believe you can actually predict the future and this leads to losing money.
Moving Averages are an “aid” to trading. Got it? A visual aid nothing more and nothing less. I use one in my day trading simply to keep me on the right side of the trend.
Day trading is not about taking many trades throughout the day. Successful day trading is waiting for 1-4 high probability trades each day and trading them successfully. What is successful trading?:
1) Not risking more than 2% of your equity on any one trade
2) Cutting those losing trades.
3) Letting the winners run
4) Being consistent. YOU MUST stay true to one method and not jump around from method to method and/or keep tweaking the rules.
I want to be clear here. This is not going to be a “How to Guide” It’s a very basic and very easy system. Apply it consistently with low leverage (<3X) and see your account grow over time. What kind of returns can be made? 2-6% per month. There will be losing periods. Heck you will even have losing months. No day trader I know wins every month. Your job is to keep those losing periods down to a minimum so you can live to trade another day.
I have seen systems promising 20%+ per month. But when you look at their “hypothetical results” you have to lose up to 75% of your money to do this? And what if it stops working? Be realistic. Don’t be greedy. This leads to big losses and stress. Be happy with small monthly gains that grow. 4% on $200,000 is $8,000 per month. I once talked to a guy whose job it was to evaluate trading systems for an auditing firm. What he said has always stuck with me. He said, “Mark” out of the thousands of systems I have come across this is what I found. The very simple systems. The ones you could write on the back of an envelope were the winning methods. The more complicated the system. The more rules and indicators that had the worse their performance. Amazing. And some of these systems trades institutional money worth hundreds of millions of dollars. I am trying to drill this into you because it’s human nature to want a super complicated system. To beat the markets using something new. I have seen traders making millions. And every time it was with a very simple system BUT the markets lined up. I.e the markets moved big. And when they do you want to catch those moves with a simple price system. It’s never the system stupid it’s always the markets and
the trader trading them. When I started day trading forex. I tried to scalp the markets using 1 minute and 5 minute bar charts. I lost tons of money. I am telling you now anything less than 15 minute charts and the noise, random movement is too much to trade. When I moved up to 15 minute bar charts and went with the trend I started making money. Not on every trade. But over time I was making more than I was losing.
Go with the Trend:
We are day traders but you still get the best moves that go with the trend. Markets react, correct and move counter trend for a short. For this use a 30 bar Expediential Moving Average. Overlay this on the 15 minute Bar chart of your currency pair. (Here I use the Euro$/USD) Trade from 08:00 GMT until 17:00 GMT only. Ignore all news items/ fundamentals.
What you want TO SEE ARE prices (15 minute bar) go through the 30 bat moving Average. Then wait for the correction.
*** PRICES MUST NOT CLOSE BACK THROUGH THE MOVING AVERAGE**
So if you are looking at buying the EUR$ and the price goes up through the 30 bar Moving average on the correction the 15 minute bar must not close below this moving average. If it does scratch the trade and wait. You have to be disciplined and patient. It’s about getting a few almost certain possibly trades every day. It’s not about jumping in and out randomly.

Enrty
15 minute bar with the M.A. I talked about above. Entry is either:
1) A break out from the minute bar.
2) A breakout from a reversal.


See the trade below. Take the breakout of the 15 minute bar UNLESS there is a reversal bar which gives a better entry. Always enter orders 3 pips above or below the 15 minute entry bar.
Simple tutorial for day trading


Exit
Once in a Trade your exit is simply by using the following rules on your trailing stop loss: When you are in a trade this is how you profit or get out with a small loss. You simply trail the stop loss as the trade goes your way. Do not try to get out when you “think” it has moved enough, etc. Let the price hit the stop to get you out:
1) When you are in a trade. The initial stop goes at 20 pips away. Use hard stops. The maximum you want to lose is 20 pips.
2) Keep trailing the stop by 20 pips as new lows/highs are made.
3) When you are 20 pips up in profit now trail your stop by 15 pips.
4) If you are lucky enough to hit 30 pips in profit now move your trailing stop to 10 pips.
Most of the time you will get knocked out of the trade with around 10-15 pips profit. Occasionally you snag a real fast market and I have made over 50 pips on some trades. The tightness of the trailing stop usually means you can’t ride out the correction. But we don’t want to.
That’s it. Trade. Watch, wait and repeat. GBP/USD Trade: Small consistent profits using my simple system. Sorry I couldn’t add more fluff and page filler for those guys who want a 200-page+ system. It’s not my style. Get in the markets and start looking for these trades.
Simple tutorial for day trading


Day trading can be as stressful or as enjoyable as you make it out to be. OK? If you find your-self worrying excessively about your trade is it because you are trading too much? No confidence in the system? Trade light. Keep the margin down. It’s not about getting rich quick but having the ability to make a few hundred dollars or a few thousand dollars every month from the markets from your home. Some traders I know stop trading when they hit a daily target. So they make $700 and call it a day. Others trade all day. It’s your choice but if you are in it for the long term think about taking some time off regularly.

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