Trading Strategies

There are many strategies that I’ve come across and implemented in the past. I’ve also changed my trading style over the years from scalping off 1 & 5 minute charts, to day trading and more recently, to swing trading which is my preferred way to trade.

I’ve worked hard on my trading in order to hold my positions for longer periods instead of simply playing it safe and closing them at the end of the day. Additionally, I look at strategic places to add to existing trades and really maximize the profit I can make during the course of the week.

A lot of the strategies I use can be applied across all time frames, using price action to give me an indication of what the market is likely to do, based on the market structure and previous price behaviour as well as chart patterns and candlestick formations.

In particular, I look for previous areas of support and resistance especially interchanging support and resistance levels, plus previous days highs and lows, where price has reacted strongly in the past and is likely to do the same again.

I use some basic technical analysis tools such as trendlines, channels and moving averages to get a directional bias of the market, however, my charts look pretty clean without any technical indicators or oscillators as you can see below.

One piece of advice that I learnt a long time ago was to always trade in the direction of higher time frames, and I’ve tried to incorporate that nugget of information into my trading. For example, if the daily and hourly charts are bullish then I look to trade on the long side on the 15 minute chart. This way I filter my trades along higher timeframes and try to stay in step with the long-term trend.

WARNING!

It doesn’t matter how good your trading strategy is, if your risk management is poor, you’re definitely going to lose your money! Therefore, I strongly recommend that you always manage your risk as follows:

  1. Only stake a maximum of 2% of your capital per trade.
  2. Always use stop losses when you trade.

Personally, I use 30 point stop loss with every trade and I usually tighten that stop as the trade begins to move in my direction. On the flip-side, when a trade fails to move as expected I look to cut the trade and often close out positions manually before my stop is hit.