Before we move to the main strategy, let's talk about your mental strength. Here's what you need to understand:
- You can't modify your trades once you have placed it
- You are obliged to take 1% Risk per Trade
- With this strategy, you generally don't trade more than one pair
- You don't need to analyze any other Timeframe but a 1-Hour Chart
- It would be best if you learned how to take Losses
- You focus on long term success only
Let's dive into the 1-Hour Chart Day Trading Strategy!!
Have a look at the following chart. What do you see? Where do you think the PRICE will go in the long run?
Rules of this Strategy:
1. Open 1-Hour chart of your favorite Forex Pair in the morning and observe the Trend (is it above or below 200 EMA? Remember, you only do the Analysis on 1-Hour Chart. You don't have to compare it to any other Timeframe.)
2. If the Price is below 200 EMA, you only look for SELL Opportunity and vise versa
3. In the chart above, have a look at the Daily High/Low Ranges. (The Daily Range shows you the average pips it can move up or down. Your profit target must be within Daily Range)
4. Once you are clear that you can only either BUY/SELL, the next thing you need a strong Entry Signal. (FInding the ENTRY Point is the single most important ingredient to your trading success. Remember, you Trade what you SEE, not what you THINK. So what do you see? Let me help you!
- As for the chart above, you'll see that, after you have opened the chart at 8.30 AM, the price has been retraced back to 200EMA. As soon as it touched the 200EMA, Buyers disappeared, and the Sellers came to the market, as seen in the chart above. This is a perfect time for ENTRY.
Note: Always wait for the hourly candle to close before you decide to go with the Trend. In this case, you want to SELL, and as soon as Sellers come in and strongly closes a candle, you ENTER the market.
5. It will all go in vain unless you know where to EXIT. Your Stop Loss should be 5 pips above or below the last 4/5 Candles.
6. You TAKE PROFIT(TP) in 2 stages (First TP at Middle Point & 2nd TP at Daily Range). Take Profit 1 is usually the middle point between ENTRY and Daily Range. So the Rule is, as soon as the Price moves to the Middle Point, you lose half of your position and then set a TRAILING STOP of 1.5x of ATR. It's a great way to Break-Even and takes the highest amount of Profit within the Daily Range.)
That's It!!
Once you have a complete grip over this strategy, all you need is to repeat it consistently.
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Disclosure: It's strongly recommended to backtest this strategy before applying it to the real marketplace. Even though it's a proven strategy, it still requires to get a complete grip on this method before you can practice real money with it. Previous statistics are in no way indicative of future success.
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