5 Trading Strategies That Work - Trading Strategy Guide -

Let's talk about trading strategies and in this clause, I am sharing 5 trading strategies that I use OR let used in my own trading. Each trading strategy can be listed by itself and you could too mix different ones.

Each trading strategy consists of multiple confluence factors to leave robust signals. Of course, one can add to a greater extent triggers and criteria to this overture. If you wish this approach and are interested in encyclopaedism my current trading strategies and get my trade setups, make sure to check our Masterclass where we currently have a special deal.

Trading Strategy 1: A Crown of thorns-Over System

The prototypical strategy is a hybridization-over system with an RSI tiebreaker.

I used a 20 and 40 period SMA but you can use any combination. Here just about inspiration:

Moving Averages	Trading Style
10 and 20	Short-run daytime trading
20 and 40	Medium-term trading (best for 1H and 4H)
50 and 100	Longer-term trading (high-grade for 4H and Daily)
100 and 200	Swing trading (Every day and Weekly)

I use a 14 period RSI index arsenic a trend tiebreaker. When the RSI is preceding the 50 level (orange line of work), you only look for bullish signals. And when the Price is below the 50 level, you lonesome scan for bearish cover-overs.

Let's take a feel at the situation below and I wish go through points 1 to 4.

1. The short-condition moving average crosses above the longer-terminal figure MA. This is a bullish signal because information technology means that the low-term prices are uprising concluded the longer-full term prices. It signals bullish momentum.

2. The RSI is trading above the 50 level which means that it would have been OK to follow the bullish cross-complete signal. The RSI is, therefore, a filter tool. If the moving averages cross into a bullish signal but the RSI is below the 50 level, a trader would not open some yearn trades.

3. The succeeding moving fair fussy-complete to the bearish side happened here. Although the moving averages came close to crossing before, you must waiting for a confirmed cross.

4. The RSI unfit down the stairs 50 with the crossover, confirming the pessimistic signal.

Of course, you can layer more criteria on top of those two. For example, a trader tush tally trendline or horizontal breakouts to the strategy. Or even bestow a longer-full term flaring average as an additive trend way filter.

I put together more trade studies for you below.

At point (1), the moving averages crossed bullish. The damage was trading supra the moving averages before already, simply you must wait for a cross of the moving averages. When the moving averages crossed, the RSI was already above the 50 raze, confirming the optimistic trend signal.

By now you bathroom probably already follow the system and understand how a pessimistic setup was created at points 3 and 4.

I do non recommend to just start trading this approach blindly. As an alternative, try information technology out happening a need account and get a feeling for how the components work together. You may want to make alternations or contribute different tools to this approach.

Besides, make predictable to consult my latest clause about stops, targets, and winrate when information technology comes to choosing the right parameters for your trading approach path.

Trading Scheme 2: Spikes &adenosine monophosphate; Traps

I exploited to trade spikes a lot. For that, I set the Bollinger Bands(r) to 2.5 standard deviations to create a wider channel. With a wider channel, a price spike through the channel is more meaningful and a significant effect. You could even limit it to 3 standard deviations to sink in knocked out more price activeness and find bigger spikes.

A spike entirely is not enough and I recommend adding a candlestick permeate on top of it. A spike that comes with an engulfing candlestick or a pinbar usually provides more robust trading scenarios.

In the example beneath, the price made a significant spike through the upper circle and immediately retracted back inside the channel. The fact that the price closed support inside the channel is another Francis Scott Key component. During strong trends, the price will sometimes close outside or very close to the outer bands. You must ward of those situations and wait for a complete rejection.

In this scenario, the empale happened atomic number 3 a pinbar and, thus, provided at least 2 confluence signals: a channel spike + a candlestick confirmation.

In the scenario below, we can see a spike, a pinbar and besides the confluence of a premature affirm domain.

The hardest part when it comes to using nine-fold confluence factors is passing on trades where you are missing barely cardinal. Army of the Righteou's assume you see a great spike but No separate confluence factor. In such scenarios, you must skip the trade even though it English hawthorn reckon same tantalizing. Merely if you built a system of rules that requires additional confluence signals much as a candle holder form and maybe even a signal at a previous support/opposition area, you have to espouse the rules and skip the deal. This is where many amateur traders tail't sit on their hands just IT is absolutely crucial to only trade when you have a complete trading signal.

Therefore, write fallen your trading rules and put them where you posterior see them entirely the time during your trading. It is a constant reminder of what you are looking.

Trading Strategy 3: Momentum Divergence

Divergences are one of my favorite tools and I have been using divergences for days in several of my trading strategies.  I discussed the concepts of divergences at length in other articles.

In the screenshot beneath, the price successful a quadruple divergence at point 1. The price successful 4 consecutive high-stepping points (2), but the RSI made 4 successive lower lows.

As of committal to writing this, the price made multiple consecutive bring dow lows (3) and the RSI is making higher lows (4). This indicates that the movement is losing strength.

Of path, this is not sufficiency to enter a deal because the toll can keep trending for a longitudinal clock time even though it shows a deviation. As with all trading strategies, we need to append additional confluence factors to a divergence strategy.

The screenshot below shows the Saame scenario from supra but this sentence I added a 40-period moving average and trendlines; we bequeath discuss trendlines as scheme 5 in this article.

The duration of the moving average matters here a lot and you can see that the terms violated the moving average multiple times during the uptrend connected the left. Hence, a longer period moving fair would have been a better choice for such a volatilisable market.

The trendline at point (1) worked considerably and information technology wasn't until the trendline was broken that the trend in reality turned pessimistic.

The current trendline at distributor point (2) hasn't been broken yet and, therefore, no bullish signal was provided. Equally mentioned earlier, just a divergence by itself is non a strong enough signal and the trendline conflux factor plant well in this scenario. Now, a trader would simply wait for a fortified breakout of the trendline before looking for purchasing opportunities.

Trading Scheme 4: Jailbreak System

Crosswise breakouts are among my favorite trading concepts and peculiarly for new and struggling traders, spotting swimming levels is usually much easier because they are very aim.

A estimable horizontal level is validated after the second touchpoint and with all subsequent touch, a grade gets increasingly weaker.

In the screenshot to a lower place, the horizontal ohmic resistanc level at point (1) has around 5 touchpoints. Such a level has a high likelihood of breaking. Even more so, just earlier the jailbreak, the price was "sticking to the level" which means that the sellers were not able to push the Leontyne Price lower and the buyers came into the market more and more. In my trading, I call up this conception a "lower bounce" and it often foreshadows a high chance breakout.

Once the price has broken taboo of the sideways range, a dealer would wait for short-change consolidations that allow you to draw flat levels at the cover. Points (2) and (3) are great examples here. Such consolidation phases are often used to time trend-following entries and I talked about this in the ult in my pullback-strategy pass around.

To improve the hardiness of trading signals, unmatched could lend a moving average to the chart as shown in the screenshot below.

The moving mean acts as a trend management filter and one would alone wait for trades into the direction of the moving average.

At point (1), the Price crosses above the moving average and the trader would pop looking bullish opportunities. Such swerve-following scenarios occurred at points (2) and (3) when the price ready-made sideways consolidations where IT was possible to draw a horizontal resistance unwavering at the top. The price stalled soon during those sideways phases and the breakout signaled the continuation.

At guide (4), the price crossed below the moving average and it also broke tabu of a sideways range that market the top of the uptrend. Often, such top patterns also show divergence signals and one could add an RSI index number as a third confluence agent.

At point (5), the short sideways integration with a horizontal financial support level broke and because the Price was below the moving average, the trader would search bearish opportunities.

At point (6), the market ready-made a bottom radiation diagram with a horizontal resistance level and the breakout happened simultaneously with the cross of the stirring average.

Trading Scheme 5: Trendline System of rules

Trendlines ass represent Sir Thomas More unobjective than naiant levels but they also mold very well.

The screenshot below shows an overall primary uptrend and inside the uptrend, the monger would look buying opportunities.

With the help of trendlines, one can identify consolidations effectively. When you can connect 3 or more highs and find a downwardly sloping trendline in an upward trend, a bullish breakout often signals a cu continuation.

Entirely three points in the screenshot beneath show such periods where the sideways consolidation was defined by a downward sloping trendline. And each time, the breakout signaled the prolongation.

Hurtling averages are an ideal filter for trendline strategies. Haunting averages work best during trending phases and then do trendlines.

In the screenshot down the stairs, I added a 40-period moving average to the chart. For all 3 trendline breaks, the heartwarming average as wel confirmed the trend direction. Not only was the Price trading below the moving average for all signal, but the moving average itself was also pointing descending, confirming the movement direction, once the trendline bump off happened.

Over again, I do not recommend that you copy those trading strategies blindly but consumption IT as an inspiration. Test different ideas, see which one feels natural to you and then explore how you can make IT for your have personality and trader profile.

Source: https://tradeciety.com/5-trading-strategies-that-work-trading-strategy-guide/

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