The Easiest Day Trading Strategy

By Victorio Stefanov

There are several day trading strategies in the world, some that claim to make millions of dollars and are solely
based on indicators. Well even if indicator-based strategies work for a while, they’re inconsistent. This article
outlines a very simple day trading best strategy that can be used in any market. Whether it’s used on stocks, best
futures trading or Forex. The strategy stays consistent and true. This is the buy the dip strategy that can work in
any market condition but works best in a bullish market. The beauty of this easy day trading strategy is that if you
drop down to a microstructure you can always find a buy the dip opportunity.

What is the buy the dip day trading strategy?

This is the easiest day trading strategy out there! The buy the dip day trading strategy is a trend following strategy
where a trader looks to buy a small pullback in the overall upside trend. The difficult part of this strategy is
identifying the trend, finding the level at which price could pullback for the continuation and managing risk. We’ll
make it simple for all of our readers today and break it down for you.

The premise that makes this trading strategy successful is being able to identify the last chance the buyers have for
the trend to continue to the upside. This day trading strategy is really effective in a bull market or at least an
upward-moving day where you can find bullish microstructure moves.

Below is an example of the buy the dip strategy. The image on the right is the perfect example of the strategy, this
usually doesn’t happen but the idea stays constant. The high is broken and the price retraces into that high before
continuing. Price can drop down to the impulse where it started from. This is what we call the last chance for the
longs to continue.

What charts do you need to look at?

There are so many different charts you can look at for this strategy, and that is dependent on the asset you trade
and the timeframe you plan to hold the position. We’re day trading, right? So we have to drop the time frame used
on the chart quite a bit.

If you use this easy day trading strategy, we suggest using a multi-timeframe analysis. This is however dependent
on the asset chosen to day trade.
When day trading futures, the TRADEPRO Academy specialty. We shy away from time-based charts and focus on
tick-based charts because that is how the futures market moves. On a tick to tick basis. We like timeframe charts to
see the overall trend of the market on a larger scale. Looking at a 30-min or a 60-min chart to find key levels first
then dropping down to find more concrete levels to buy the dip.

The three main charts used in day trading this strategy for futures are a 60-min candlestick, a 10-tick range bar
chart, and a 5-tick range bar chart.

Below is a 60-minute chart where traders identify the overall structure of the market and strong support and
resistance zones (in green). This is based on previous price action on the left of the chart. Identifying these overall
areas that can be translated to small framed charts that identify the microstructure of the moves. The
macrostructure can be seen here on the overall trend.

From the 60-minute, we’ve mapped out general levels of support and resistance and then drop down to a 10-tick
range bar to identify those levels better. What we are looking for is trend continuation. A broken high and a retest
of that high. For the continued bull trend.

The last piece of this puzzle is the 5-tick chart where you can see the movement, rotations and more on a
microscopic and in-depth level. This is where you see the pullback into your broken high and rotations to identify
the structure holding of the buy the dip trade opportunity.
How to use the day trading strategy effectively?

The easiest day trading strategy is used most effectively in a bull market or in a microstructure bull move. Just
because an overall trend is down, doesn’t mean that the intraday trend will be down as well. If you are day trading
there will be moments of upside structure throughout the day. This is where you can capitalize on the buy the dip
day trading strategy.

The idea is pretty simple. You wait for the structure to form to the upside. Meaning higher highs and higher lows.
Then you look for the continuation in momentum to the upside. When a high breaks, the pullback for the buy the
dip strategy can stall at one of two levels if the upside should continue.

1. If the high breaks, we expect the price to pullback to the broken high, stall and continue to move up. This
means higher highs and higher lows are formed.
2. If the high breaks, the price can pullback to the start of the move that broke that high. As long as the price
does not go below, the asset has shown equal lows or slightly higher lows and higher highs. This is a little
less bullish but holds the upside structure.

Traders should know that just because the price retraces into one of these areas you should buy it right away. A
key secret to understanding where the price will stall is rotations. Once price rotates at that area on the 5-tick then
the buyers are holding their ground. Rotations are sideways, bear and bull candles.
How to manage risk in this strategy?

Risk management is a pivotal part of any trading strategy. This should be implemented in the buy the dip day
trading strategy just like anywhere else. Know your risk parameters. Meaning how much you are risking per trade,
per day and per week. Make sure your stops and take profits are set and don’t move stops unless you’re making a
profit! Trailing stops is great if you are limiting the risk.

A lot of traders move stops to give the trade more room, but what if it doesn’t turn around in your direction? A
massive loss is accumulated. With the buy the dip strategy, you can envision where your stop would be. Place your
limit based on where your stop loss is! It’s easy with this day trading strategy because if you place your stop
accordingly it would be in the area where the trend is broken. That means the buy the dip would be disqualified.

Conclusion.

The buy the dip day trading strategy is extremely simple. It is a discretionary day trading strategy so that means
that there are many variables that traders must be aware of. Risk management is a huge portion of this day’s
trading strategy. However, with practice and understanding of the market and price action, a trader can turn this
into a highly profitable strategy.