Stochastic, MACD, Bollinger Bands Plus Day And Swing Traders

The three-step day trading method combines the daily, hourly and the three-minute charts. Instead of breaching the top-down day trading principle, one is using three times frame. Each time frame has its own purposes.

One will search and identify bullish and bearish high probability day trade set-ups on the daily chart. Advanced technical traders will validate those day trading set-ups on the weekly chart or higher. One will thoroughly analyse each price structure before going to step two. The step one is more important than the second step. Once, one confirms a daily chart high probability day trading set-up, one will implement the second step.

One should always have two watch lists.

One bullish and the other bearish. Day traders must always be ready to sell or buy.

To speed up the search of those high probability day trading opportunities, one can use stock screening software with a valid search criteria. Once the software fetches the search result out, one must manually filter out useless ones, and keep the best day trade set-ups.

It is essential that one does not rush or skip steps.

This time, one will switch to the hourly chart, and patiently wait for a clear-cut

direct day trading signal. One will make sure that a bullish day trading signal is near a support level, and bearish direct trading signals in the vicinity of a resistance. Note that only the price gives direct trading signals.

To master this day trading method, it is essential to understand that the hourly chart is the medium term trend of the daily chart (daily chart is the long term trend for day trading purposes). The next thing one should also grasp is that the day trading set-up either technical or fundamental generates the trading signal. Therefore a useless day trading set-up is more likely to produce unreliable day trading signals. Nevertheless, if the signal fails after one has placed the trade, one will close the trade as soon as possible.

The third step consists of switching to the three-minute chart where a day trader will select a low risk entry point.

Note that the trade entry is a secondary confirmation of the signal on the short term time frame (3M). At this stage, one will re-examine the overall risk, and only take day trades that comply with one own risk tolerance. For example, if both the day trading set-up and signal are adequate, but the risk is too high, one can stay out. One is not obliged to take risky day trades.

The last thing a day trader ought to do is to manage the day trade after the entry.

What is day trading?

What is a specialist day trader?

What is a top-down day trading?

Why is it essential?

Name five high probability day trade set-ups

What is convergent day trading signals?

What is a fractal day trading signal?

What is a direct day trading signal?

what is an indirect day trading signal?

Why do some technical traders prefer the 20 hours

daily chart?

Why others prefer two-day chart instead of daily chart?

At what time do the pros generally start day trading?

Why is it essential to wait until the first thirty-minute candle bar is formed before one starts day trading?

What is a day trade set-up validation?

How would you validate a two-hour chart day trade set-up?

How would you validate a daily chart trade set-up?

Why some traders prefer the three minute chart to 5-minute chart.