How to Day Trade Strategy
How to Day Trade Strategy How to Day Trade without the noise! Looking at this picture of a 1 hour chart gives you a good idea of which way you shoul...
How to Day Trade Strategy
How to Day Trade without the noise!
Looking at this picture of a 1 hour chart gives you a good idea of which way you should be trading
If you are day trading a one minute chart, you are trading with a lot of noise, it is a stressful activity (as it needs speed), and novice traders are often wiped out when things get rough. Too often traders who trade noise are over traders, loving the action of the fast charts.
To trade this method you need nerves of steel and you have to have the type of personality that can handle it.
When you eliminate the noise from your chart it is much easier to determine the trend of the day. Isolating trend direction by eliminating minor corrections and showing only larger trends is the start to emotion free trading.
One way to eliminate the noise from a chart is to use a higher timeframe and another is to utilize an indicator a lot of charting providers have, and that is the Heikin-Ashi. The Heikin-Ashi technique is extremely useful for making candlestick charts more readable- making trends more easily identifiable and buying/selling opportunities can be spotted with little difficulty.
There are probably many traders who are making money scalping the one minute chart. However, if you want to eliminate noise you have to trade off a higher time frame. Many novice traders are trading a one minute chart because they have a small account and want to keep their stops small. (This is not necessary when trading the Forex market. With a micro account you can trade with as little as .10c per pip.)
The higher the time frame the larger the stops, but the same goes for the trending profits.
How to Day Trade without noise, is to trade off a chart no lower than a 1 hour and using the Heiken Ashi is absolutely magic to view the bigger picture. To really be able to see what is happening on the bigger picture start off on the daily chart as it allows you to see the overall trend. That doesn’t mean you have to trade off the daily but you certainly can trade with the direction of the daily or 4 hour chart.
Using Heiken Ashi smoothing custom indicator only, no candles, you can clearly see when there is a downtrend or uptrend by the colors of the indicator candles. It is not a good idea to trade off this chart because the market can be way ahead of the Heiken Ashi candles and this can become confusing.
You enter the market according to the Heiken Ashi candle and find that the market is not where you entered, as this indicator is lagging the market, however if you have the Japanese Candlesticks on the chart as well, you can see where the market actually is.
Remember that you will always take losses but trading with the Heiken Ashi can assist you to stay in the trend until a change of HA candle color.
How to Day Trade using Heiken Ashi indicator:
There are five basic candle signals that identify trends and trading opportunities:
Hollow candles with no lower “shadows” indicate a strong uptrend: let your profits ride!
Hollow candles signify an uptrend:
One candle with a small body surrounded by upper and lower shadows indicates a trend change:
Filled candles indicate a downtrend:
Filled candles with no higher shadows identify a strong downtrend: stay short until there’s a change in trend.
