One thought that many traders consistently obsess over is how to create simple trading strategies that offer the lowest risk and the highest reward. I can relate to this because I used to go through this type of thought process myself several years ago.

One day by pure chance, I stumbled on a trading pattern that allowed me to enter the market with very low risk while maintaining the ability to profit substantially. What I liked best about this method was the strong momentum that follows after the entry signal is triggered.

This strategy works with stocks, futures, commodities and Forex in case you trade any of these markets. The first thing you need is a strong trend going either up or down. You can see in this example how the stock in this example is trending strongly.

You want to make sure you find good trending markets so that your odds avoiding getting stopped out are substantially decreased and your profit potential is substantially increased.

Once you identify the trend you have to identify the actual set up. The 2X inside day is a cone shape pattern that has two inside days inside of each other. I developed this set up to find days within a trend when the market slows down substantially and takes a breather from volatility. This offers me the opportunity to enter during a quiet period before volatility picks up once again. I also consider the fact that no lower lows were made and price action was able to maintain inside the previous low demonstrates continuing strength may be ahead.

This is the type of set up you want to find when trading the 2X Inside Day set up. You can get a closer look of the pattern in this example. Notice how each succeeding day is inside the previous one. The trading action gets very tight which lowers your risk level substantially when you enter set ups with low volatility such as this one?

The entry signal must be triggered on the fourth day. If your buy stop does not get triggered on the fourth day you must cancel your order and the trade is nullified. Once the entry stop is triggered you should always immediately place a stop loss order below day three low.

Simple Trading Strategies - The Inside Day Strategy

The profit target for this strategy is set to 4 times your risk level. You can see the entire sequence from entry to exit in this example. The 2X Strategy works equally well to the downside as it does to the upside.

You can see in this example how the stock broke the uptrend and is developing a good down trend. This is a good example of the type of trading action you want to forex inside day trading system pdf before the trade set up.

The beginning of a trend is a great place to enter because momentum usually increases as trends continue moving in the same direction.

The Inside Bar Breakout Trading Strategy | Forex Crunch

Once you establish that the market or stock your trading is in a downtrend, you need to isolate the set up. In this case you would once again look for 2 days that are below the high price of the previous day and above the low price of the previous day.

Once you see the set up a few times you ways to make money legally start noticing it over and over again when you scan charts for your daily hit list. You can see in this example exactly what the set up looks like.

Each Days High Price Is Lower Than Previous Days High Price And Each Days Low Price Is Higher Than The Previous Days Low Price. This example demonstrates exactly where the protective stop loss and the entry sell stop levels go. You can see the entire sequence on a investment options for roth iras chart which may stock brokers tampa florida you a slightly different perspective on the set up and the entire trade sequence.

The key to this strategy is isolating patterns where your risk is extremely limited such as these two examples I provided for you today.

Next time I will demonstrate more inside day strategies so you can take advantage of low risk entry opportunities. For more on this topic, please go to: Member Login Technical Support.

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Make Sure You Always Follow The Trend On Daily Charts. Each Day Is Inside The Previous Day. Due To Low Volatility The Risk Level Is Low On This Set Up. The Risk To Reward Ratio On This Strategy Is The Best I Have Seen. Uptrend Breaks And Downtrend Begins. Once Entry Stop Is Triggered The Stock Never Looks Back. Notice The Stock Fell Another Point After We Got Out Of The Trade. Related Posts Cup And Handle Pattern Recognition And Chart Analysis.

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