Profitable Daily Strategies

As a rule, the majority of newby traders start their first acquaintance with the forex market by trading in short-term time frames. But after a while, they come to the idea that to save their time and nerves they need to work in higher time frames.

There is one more reason. It is that the quality of analysis on higher charts is much higher, and the accuracy of entry into the market increases. This is because there is a large amount of so-called market noise in low time frames. And in the higher charts, there is almost no noise. The trades can be open from a couple of days to a week or more. In addition, the advantages are the low level of stress, a small initial deposit, and very high profitability. These are the advantages of long-term trading. In this article, we will tell you about the strategies for working on daily charts.

The Bow Tie Strategy

This system is one of the advantageous daily trading systems, which is based on the crossover of Moving Averages with different settings.

All market traders are well aware of the fact that any trend will not go on forever. The reversal is inevitable, it will take place sooner or later. But if you catch a such moment and timely open position for buying and selling the asset you can make a good return on the new trend.

Setup

This trading system was created specifically to help catch a trend reversal. The method is even used intraday, but it will be much more effective to apply this trading system in the daily time frame. What is needed for trading? The following tools should be applied to the chart:

• SMA with settings for ten days, color it blue;
• EMA with twenty days settings, color it brown;
• EMA with thirty days settings, color it red.

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Signals

Above, in the daily time frame of the currency pair GBP/USD, we can clearly see the reversal of the trend - the crossover of the very indicators we have listed. The blue MA is positioned above the others, the brown one is lower and the red one is higher. After the indicators have crossed, they have gone in different directions. Now the blue MA is higher, and the red one is lower.

Moving Averages that have converged at one point and then diverged, visually resemble a bow tie. The name of the trading system comes from this resemblance. After the crossover, there is usually a powerful movement. In the case where the trend is bullish, the most successful entry will be a white candle, which comes right after a black correction candle.

A protective stop order is better placed further away from the current prices, so as not to be accidentally knocked out. Some traders practicing the system do not place takeovers. They move the Stop Loss along the MAs or use a Trailing Stop.

Intraday Non-Indicator Forex Strategy

As we know, trading systems without indicators are the most effective. Systems based on indicators work only under ideal conditions. Japanese Price Action candlestick analysis, on the other hand, always works, and it is very flexible. Good moments for opening positions appear when the opportunity for entering gives the price itself. The Price Action allows us to define a new trend at the very beginning and to attain an excellent yield.

Accurate entry points occur in this trading system on both daily and intraday candlesticks. Keep in mind that if you only use one currency to trade, you will get entry points quite rarely. It would be a good decision to expand the number of assets you trade. Also, keep in mind that you will accumulate a negative swap if the orders are open for several days in a row. But the returns will more than cover it.

Trading on the Price Action is carried out by taking into account the main trend - if the trend is strong in the ascending direction, it is necessary to work with long positions, and if the market is bearish, it is necessary to focus only on short ones.

This system is based on a single Price Action pattern - the Pin Bar. It looks like a candle with a very small body and a very long shadow on one side.

The screenshot below shows to buy and sell pin bars. You can see how they were formed near important levels, and trend reversal patterns. Note that when patterns appear near important levels, it greatly increases the power of the signal. We believe it is correct to enter a trade only after the candle that formed the pin bar has been closed and a new candle has opened.

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For example, if the pin bar was formed at a resistance level, we open a short position. If the pin bar appears on the support line, we trade long. It is possible to work on the charts from M30 to D1, in higher periods the signals will come even less frequently.

In addition to the bullish and bearish pin bars, there is the so-called internal pin bar. You can see what it looks like in the screenshot below. This is a reversal pattern. The entry point in this case is the upper limit of the candle in which the internal pin bar is formed.

You can install any of the pin bar indicators to automate the search for patterns on the chart. It will search for the necessary formations and, if detected, will signal it to the trader.

Nomad Daily Trading Strategy

This trading system is very easy to learn and apply, it is built on classic indicators, and is ideal for beginner traders. In order to start working with the system, you should place the following indicators on the chart:

• EMA with periods of 5 and 12;
• Oscillator RSI with a period of 20 and an additional level of 50.
  The Moving Averages in this case play the role of the main tool, and the Relative Strength Indicator plays the role of the filter. Let us tell you how to open trades using this system:
• When the fast MA with a period of 5 crosses the slow one with a period of 12 upwards and the RSI oscillator crosses the 50 line upwards, we open a long position.
• When the fast MA crosses the slow one from above downwards and the RSI oscillator breaks the 50 boundary from above downwards, we open a short trade.

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This trading system is very easy to learn and use, and there are no conditions other than the entry point itself. You can determine the Stop Loss and Take Profit yourself. The main thing is to stick to the rule that says that the TP should always be bigger than the SL. By the way, you can place SL at that level of support or resistance, which is closest to the entry point. But keep in mind that it is possible that a situation can change when you have to exit a position urgently. Also, you can close trades on a reverse signal.

MA + MACD + Stochastic Strategy

The trading system, which we will talk about next, is somewhat similar to the previous one. It is also based on two MAs. However, as a filter here is added not one but two indicators.

First of all, we place these tools on the chart:

• EMA with settings of 8 and 34;
• MACD, keep default settings;
• Stochastic Oscillator with settings of 9, 3, 3.

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Once you add the indicators to the chart, you can start trading.

The conditions for opening buy orders:

• The short MA has crossed the long one from the bottom to the top;
• MACD is in the plus area, above zero;
• The Stochastic oscillator has just begun to exit the critical zone of 20.

We sell under the same conditions, only in the opposite direction.

Just as in the previously discussed strategy, in this system, SL and TP are set at your discretion. Keep in mind that the size of a single candle in the D1 time frame is much larger than in the lower time frames, so SL that is at the nearest level may be very far away. It would be wiser to set it at the nearest extremum. Set TP with a minimum excess of gains over losses of 5:1 or more. Then, one winning trade will compensate for the losses of the whole losing series at once.

Bill Williams' "Antiprofitunity" Strategy

Bill Williams is certainly one of the most legendary traders. His trading strategy Profitunity is one of his most popular trading systems. At the same time, the attitude of the trading community to it is ambiguous. The fact that author talks about his system as a breakthrough and a unique method, but at the same time, the composition of the strategy is quite ordinary, because his Alligator indicator is based on conventional MAs.

The Profitunity system has some disadvantages. The author says that it is universal, but to be fair, it is much more advantageous and successful in the stock markets, rather than in the forex market. Taking into account all the shortcomings, traders have modified the original and created a much more applicable forex market trading method, specifically for trading on daily charts.

The trading system offers the use of the same indicators as in the original Williams' system: Alligator and AO. Fractals are not used in this strategy. Also, the rules of entry into trades have been changed.

We should enter a short position under this scenario:

• A bearish divergence between price extremums and the indicator AO is formed;
• A pin bar is formed at the current price extremum;
• The currency rate is above the Alligator indicator.

We will buy under the same scenario, only in opposite conditions.

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SL should be set at the extremum, which is closest to the price. Also, the fractal indicator is useful for setting a Stop Loss. It is best to close the trade at a fixed TP, exceeding SL by 4-5 times, or by a Trailing Stop. It is not advisable to close on a reversal signal, it may not exist, and you will end up in a drawdown. You do not need unnecessary losses.

The main feature of this strategy is that you enter the trade against the current trend movement. It greatly increases the potential earnings. The earlier the entry into the market is made, the more beneficialit is.

How to Reduce Risks When Trading

One of the most important things for a trader is the moment of risk reduction. Most experienced traders advise entering the market with pending Buy and Sell Stop orders rather than following the market.

If you are trading a counter-trend, then look for entry points when the main trend breaks, use pending orders: put them at about 400 pips away from the last maximum or minimum of the price. So when you're waiting for a breakout of a bullish trend, set your Sell Stop 40 pips below the last low of the price. If your prediction fails, you will not lose anything and you will not catch a Stop. All you will have to do is delete the order that did not trigger.

Also, remember that when trading daily charts you need to watch the economic news. Powerful political and economic events can significantly affect the rate of currency pairs, which correlate with each other. Therefore, if you notice in the economic calendar an important event, it is better not to trade on that day.

The strategies described in this article will perfectly save your time and nerves. Day trading is a great strategy from the point of view of the ratio of time spent to reward.

Pros and Cons of Daily Forex Trading Systems

Daily charts are quite soft, smooth, and measured than the same hour or five-minute chart. Indeed, if within the same set of trading sessions the passions can rage, the daily charts are very calm. Compare the hourly chart to the daily chart. You will see that the hourly chart is characterized by powerful price movements and prolonged flat periods, while the daily chart is much more languid and measured.

Considering all the peculiarities of day trading, it will suit those market participants who are calm and patient. By focusing on higher time frames you will avoid small market oscillations, nervous shocks, and most of the traps for traders. The trading systems we have described will be a great value for those traders who want to calmly and patiently make the most out of the forex market.

Remember that forex trading involves the risk of losing all of your deposit. To reduce the risk, never break the rules of your chosen trading system, and always, without fail, place Stop Losses. Without limiting orders, your deposit will be burned out, either sooner or later, but with 100% probability.

Conclusion

Forex strategies for the daily chart are a great option for beginners in trading, as they are more accurate than short-term scalping techniques. Such trading is not highly dynamic, so the trader always has enough time to carefully analyze the chart and make a balanced decision.

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