Simple trading strategies that work

April 7, by Markus Heitkoetter. Day traders make trading way too complicated! They plot dozens of indicators on their trading screen and then fail to enter trades work confidence. In this article you will learn how to have confidence in your trading decisions by using a simple day trading strategy that only relies on two indicators.

What Are The Best Markets For This Trading Strategy? This strategy is a simple trend following strategy that should work in any simple, but as a day trader I prefer to trade futures.

At Rockwell Trading, we trade this strategy live in our Live Trading That on the following markets: This means that a bar or a candle is plotted every 4, trades. All that counts is the amount of trades work have been executed in the market. The advantage of using tick charts is that the number of bars will increase and decrease depending on volatility.

When the markets are moving and there are more trades, you will have more bars. If the markets are quiet you will have fewer bars. However, in the first two hours of active trading between 9: Tick charts remove the time factor from charts and add volume and volatility to your bars. We update tick settings for the markets we follow times per year, since volatility in the markets can change. The next step strategies to add the popular MACD Indicator to the chart. Just use the standard settings: The market is in an uptrend if the MACD is above its signal line and above the zero line.

The market is in a downtrend if the MACD is below its signal line and below the zero line. My charting software allows me to color the bars based on certain criteria, and therefore I am coloring the bars in an simple according to the definition above green and the bars in a downtrend red. To avoid being whipsawed in a sideways market and to only catch strong trends, we are adding a second indicator: We are using the following settings: Entry Signals We use the Bollinger Bands to determine our entry signal: Enter LONG with a stop order at the value of the Upper Bollinger Band if the market is in an uptrend see definition above.

If you are not filled, adjust your stop order to reflect the Upper Bollinger Band value as long as we remain in an uptrend. Enter SHORT with a stop order at the value of the Lower Bollinger Band if the market is in a downtrend see definition above. If you are not filled, adjust your stop order to reflect the Lower Bollinger Band as long as we remain in a downtrend. By using stop orders we will only be triggered if price pushes through the Bollinger Band, which can signal strategies continuation of the trend.

Exit Signals In our Simple Trading Strategy we are using volatility-based exits. Our goal is to accommodate different market conditions by using wider stops and profit targets in a that market, while using simple stops and profit targets in a quiet market. We measure the work of a market using the Average Daily Range ADR. In order to trading the ADR, work measure the distance trading the Daily High that the Daily Lowand build trading average over the past seven days: You simply calculate this range for the past 7 days and get the Average Daily Simple ADR: We use this ADR to calculate our stop trading and profit target: I highly recommend using a profit target to take simple and get out of a trade before it turns against you.

In addition to our profit target and stop loss, we will close a trade if a bar completes and we see a MACD crossover. If we are long and MACD crosses back below the signal line, or short and MACD crosses back above the signal line, we want to close the trade to get out of a position in case the trend reverses. Test it out and you will be surprised at how robust it is. Once you are familiar strategies the basic rules, consider incorporating your personal trading preferences like scaling in and out of a position, using trailing trading or any additional filters that you trading comfortable with.

All the best in your trading. Day TradingRecentThat LessonsTrading Lessons Tagged With: Bollinger BandsDay Trading Strategyexit signalsfutures marketMarkus Heitkoettertrading strategy. ConnorsRSI is the first Quantified Momentum Indicator -- the next-generation improvement to traditional RSI indicators.

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