* This strategy was taken from my post on the reddit community r/daytrading.
Hello everyone, this is my first time posting here. I have been practicing daytrading for about a month now. I’ve started by buying a few books and reading those, taking notes. One book was recommended on a previous post on this forum called ‘How to day trade for a living’ by Andrew Aziz. Andrew said it’s important to write down and stick to your strategy. He also mentions the added value of sharing and discussing (and naming!) said strategy with fellow traders. For that reason I’m writing this post to share my strategy and my preliminary results.
I call it my Reversal-Breakout strategy and it’s basically two strategies i now employ for trading Futures.
- Set up support and resistance zones (S/R-zones) using 15-min chart.
- Go back to 5-min chart, never trade on 1-min (always bad experience for me).
- Look for price moving toward S/R-zone.
- Wait for pullback or take a position right at the top of entrance into S/R-zone (this can be tricky ofcourse). Only take immediate position if i expect the price to bounce right back. I conclude this based on previous price action within the current day.
4.1 Get into trade as close to a fitting stoploss as possible. This decreases risk substantially & increases profit. More importantly it make me less nervous letting the trade play out longer if it takes a bit longer to move away.
5. Set stoploss a few points outside of S/R-zone, lowest / highest relevant price peek, or outside of near privot point level (standard mode).
6. Set take profit at next S/R-zone or pivot point level. Sometimes i get out quicker if momentum is weak and price might reverse. This also depends on my profit target for the day and whether i want the finish the day without too much risk.
** Second part **
7. If price moves significantly outside of S/R-zone (above or below with more than just a quick peek), wait for pullback.
8. At height of pullback, often near top/bottom of S/R-zone, get in.
9. Set stoploss outside of S/R-zone, several points outside in fact. Preferably just outside nearest significant technical level (VWAP, EMA).
10. Set take profit outside of first stalling period or at the the expected end of move (based on recent major breakouts of previous days). Stalling period is a new i gave to the phenomena where a major breakout take a pause, maybe reverses and then goes for the final push to the days new highest high / lowest low.
My experience with the strategy
I trade NASDAQ Futures and alway also look at S&P for support levels as these two seem to influence each other greatly. I personally see little correlation with Dow jones.
The above figure shows my trading performance since I started trading futures (2 weeks ago). All my days have been green (again in simulation) and profitability has increased in my second week using the strategy. Last two days were in a trading combine and somehow made now losses (that is more luck than anything else i believe). The image is taken from a custom dashboard i made in Power BI that analyses TradingView and Tradovate performance.
Before this strategy, i copied and employed Ross Cameron’s small and micro cap stock strategy after watching his video’s and reading his book. I’m thankful to him for getting me interested in trading, but his strategy did not work for me at all (Also his subscription stuff $$$ and being sued gave me the creeps).
Now this strategy for futures has been working very well. I know i’ve only tried it for two weeks and I am realistic with myself that this is no promise for the future. Nonetheless it’s been great fun and i’m nearly 2k into my 3k profit target for my prop firm combine. Especially the second part of this strategy leads to my largest winners and so far it’s been 100% accurate in the 4 times i’ve applied it.
I used to trade 1 contract of mini NQ1!. I’m now adjusting this to 3-4 micro’s NQ during and after trading hours and 1 mini NQ1! before opening hours.
Edit: I have added two screenshots of my trades from past 2/3 days.
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