Regardless of the market you trade, trading the daily charts is a viable trading plan. If you take a moment and think about day trading, what is important?

For example, if I trade an hourly chart as a day trader and my trading strategy is a breakout, I would need to wait for the breakout of course…but also the close of the candlestick to confirm. So in essence, the movement of price during the process of the candlestick forming on the chart holds little meaning.

If you think about a daily chart candlestick close, it encompasses the highs and lows of the trading day. It is a single structure that shows where control was during the day and ultimately, who won the battle. When the candlestick closes on the daily chart, you know traders are holding positions over night either long or short depending on their conviction. Not only that, the higher time frame requires a large stop loss placement and in instruments like the Forex market , you need to keep your stop a little further away from price than other markets.

If Forex trading strategy is support and resistance trades , entering using a stop order and placing your stop loss beyond a pivot low could be triple digit pips. I tell you though, if you have the the capital which will still allow a decent position size, you could be doing yourself a huge favor by getting out of the noise of intra-day trading and onto daily chart trading.

Stop complicating your trading. Believe that how you manage a trade and how you exit holds more water than the entry.

For this trading system, we are going to use simple Fibonacci retracements and a momentum indicator to help get you into the trade. We are going to keep the trading indicators to a minimum and will use price action to determine the trend. Take a look here to determine trend direction using price action. First thing you want to do is add the MACD to your daily Forex charts and use the standard settings of 12, 26, 9. We are going to use the histogram of the MACD to measure changes in momentum.

A word about the settings, there are no best settings for a Forex strategy or any other market. Like I said, this trading system is going to use Fibonacci retracements on the daily chart and we will use.

This means we are only looking to take shorts on the daily chart for our trading strategy. Those are shown with the red dashed lines and a red box envelopes both the Fib and the structure level.

The left side was cut off but this is actually a resistance level off to the left that was broken and when price broke back under it, it is once again holding up price. The green circle on the price shows the other level that was previous support. We are using the histogram of the MACD to show us momentum.

If you were to use a cross of the MACD and signal line, moves are long over. For a short trade, we want to see a rising MACD as price heads towards the confluence zone we mapped out.

Keep in mind this: We have a trade setup once price reaches the confluence zone. Once price reaches that level, we want to see the MACD histogram tick downwards indicating the bulls are weakening at this level.

The huge benefit of using a trading strategy on the daily chart is we are in no rush to do our analysis. In this example, since we are looking to short, we have this in our favor:. You could also wait for a reversal candlestick pattern but if this is what you choose you may want to follow the following plan:. The reason to drop down a time frame is because the daily chart will hide reversals that appear intra-day.

This part is simple.

Forex Trading Strategies Revealed | Beginners and Advanced Traders

We want to use the range of the market to place our stop. This is an objective way to determine a stop loss level and can keep you out of the noise that occurs that day traders have to worry about.

We will let them add liquidity to the market with their constant stop outs via close stops! We are using the standard 14 period ATR average true range indicator and using 1. For shorts, we are adding that value to the low of the entry candlestick to get our stop loss price.

Formula ATR X 1. For buy trades, we would subtract our ATR calculation from the high of the candlestick. This is a very simple way to take advantage of the benefits of trading off a daily chart. Mail will not be published required.

You can use these tags: Simple Daily Chart Swing Trading System For Forex And Other Markets Regardless of the market you trade, trading the daily charts is a viable trading plan. The close of the price bar or candlestick, right?

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Daily Chart Forex Trading Strategy. ATR STOP LOSS ON DAILY CHARTS. Posted in Basic Swing Strategies. Leave a Reply Click here to cancel reply. Powered by WordPress Designed by: Free WordPress Themes Thanks to Best WordPress Themes , Best Wordpress Hosting and Promo Codes.