Day trading Strategies

VWAP Gap strategy

Gap up stock

Bull flag (for entry mid move)




• Try to trade on first or second bullflag momentum move.

• Do not trade on third - Risky.

• Fourth - likely to be consolidation at this point

In momentum move:

After 2-3 green candles with higher highs and higher lows (open
is above the close of previous)

Bullflag pattern pullback = Series of red candles with lower high

and lower close

Draw trends line on Bullflag. When there is breakout of upper

trend line = Closing higher than the trend line can make entry on
next candle.

Volume should be low on pull back. Higher volume on breakout.

candle

Stop loss = Low of the pullback (lowest red candle)

When momentum very high and only one pull back candle (red):

Wait for entry after breakout of high of flat top of momentum move

Make entry on next candle to close above

Volume should be low on pull back. Higher on breakout candle

Stop loss = Low of the pullback (lowest red candle)

Examples: 



Flat top pattern






After momentum move:

Consolidation in price resisting a level (usually strong level in 15

min)

3 or 4 candles + resisting horizontal line. Candle lows in upwards

direction (triangle)

Sometimes up to 8 candles with at least 3 taps of line

Enter in next candle after breakout of this level

Volume should be higher than last candle on breakout

Stop loss low of breakout candle

Examples: 2x flat top breakouts within one momentum move. 


If flat top pattern forms in overbought range there will be a failing divergence:

Bear flag pattern

In momentum move:

After 2-3 red candles with lower highs and lower lows.

Bearflag pattern pullback = Series of green candles with higher

high and higher close

Draw support trend line on bearflag. When there is breakdown of

this trend line = Closing lower than the trend line can make entry
on next candle.

Volume should be low on pull back. Higher volume on

breakdown candle

Stop loss = Above high of the pullback (highest green candle)

If only one green pullback, wait for the breakdown of the low of
support line of momentum move.

Divergence strategy




Process for entry



1. Draw Divergence line and RSI trend line extended
2. Look for break of divergence line
3. Enter after EMA crossover
4. Stop loss lowest candle before reversal


Examples:

When divergence fails:

1. After entering if price fails to reverse exit immediately on Bearish EMA crossover
2. Confirmed when RSI crosses extended divergence line

Example of failing divergence 


Helps to exit early to avoid stop loss being hit