Many traders are seeking a strategy, but usually fail to take the time to learn how to implement it properly. We need both pieces—a strategy, and the know-how to implement it effectively. Becuase this is already an extensive article, links are provided to other articles with more information on given topics. Either of these scenarios are possible but so are a host of other possibilities and which one is more prevalent in your mind will bias your trading. If you are very optimistic, you may miss clues that the market is turning against you.

Your strategy gets you into a trade, with an initial profit target and stop loss. Once you are in the trade though, it is a different world. All sorts of things could happen, very few of which have been considered.

What if the price moves in your favor slightly and then starts to move against you? What if the price moves to within 0. What if the price does absolutely nothing after you get in…for 10 minutes? As a day trader is this still the same trade your originally took? As a day trader, things change very quickly. Letting the price hit your stop loss or target is fine.

That is never or rarely how I actually trade through. Active trade management, when properly applied, is far more profitable and far more consistent than the hands off approach. There is one downside: For a more thorough comparison of the differences between active management and hands-off trading, see Leave Day Trades Alone, Or Manage Them Actively.

You decide which direction you are going to trade, and before the trade you decide how to manage that trade.

Vantage Point Trading | How to Day Trade the Forex Market In 2 Hours or Less a Day (EURUSD)How to Day Trade the Forex Market In 2 Hours or Less a Day (EURUSD)

You adapt to what happens after you are in the trade. Like Napoleon on the battle field, you have calculated everything beforehand. Here is the April 14 EURUSD 1-minute chart, along with comments below. I traded for about an hour and a half. How to day trade the forex market — EURUSD 1 minute click to enlarge.

This day two hour period was dominated by news at AM EST on chart. I used a 10 pip stop loss and 18 pip profit target on this particular day. In less than two hours of trading we had 5 trades: Therefore, your daily profit is Once consistent, you can increase risk to 1. On April 15 we had a Euro conference begin right around the time I started trading on chart and that created some price whipsaws. Best to avoid…but as we can see I did take one trade in there….

Overall, in less than an hour of trading we had 3 trades: I recommend using a daily stop loss and a loss from top. Once you master this method, this should be a rare event.

You should only blow up once ever month or two. On days were volatility is lower, your stop loss and target will be a bit smaller. Be aware of super tiny stop losses though, and huge positions sizes…that can spell disaster see Reducing the Risk of Catastrophic Trading Losses. For day trading forex, use an ECN account with near zero spreads , and pay the small commission if you plan on day trading forex regularly.

When volatility shrinks the tight spread becomes more important. When it is quieter, the spread becomes much more of an obstacle, because if it is quieter our targets are going to be smaller.

How end of day trading can change your life.

Our payoff relative to the spread decreases. Save your capital for better opportunities. Assume I want to buy. That way, my order will trigger as soon as the price moves out of the brown box. If you use market orders and are even a second delayed the price could be well away from the entry point we want not good! You can set this up using an MT4 plugin, discussed here. If you trade with a broker that supports NinjaTrader—a great trading platform—that will also work well I think only FXCM offers NinjaTrader.

It will take 6 months to a year of practicing two hours a day including a few hours on weekends going through charts, reviewing, self-assessing and working on problem areas before you will likely be able to trade like this consistently see 5 Step Plan for Forex Trading Success.

What you are basically doing is planning your trades before the market even moves to your entry location. If the market does something unexpected, you adapt and hatch a new plan. This is mentally taxing , which is one reason I only trade two hours a day when I day trade. Focus on what is happening, plan and then jump on opportunities.

Keeping the mind busy with important trading tasks will keep your sabotaging emotions at bay. Some days you may have 8 or 9 trades. Other days only one or two.

Some days your stop loss will be 20 pips and your target 35…other days your stop will be 3. Post your questions though, as that lets me know what to focus on in future articles. On the April 14th chart you mention that all 5 trades are one stategy — would this be the ABC using consolidation breakout as trigger? Or would you call the trading done at the top part of the chart the range which formed after the strong run up something else?

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By the fifth trade though, the price has retraced most of the recent wave up. But given the super strong upside momentum we saw earlier, I am still willing to go long going short is not an option if looking at the bigger picture. So basically this would just be a trend trade on a deep retracement relative to the last wave up. Consolidation breakout is the trigger. I am also considering other factors. Look at the angles of ascent and descent.

They are very sharp strong movements to the upside. The overall decline into the fifth trade is much flatter shallower angle …showing less momentum when compared to the buying momentum we saw earlier. When you have strong upside movement like that, followed by a drift lower, there is likely some buying momentum left in there assuming everything else still looks good.

So while I still wanted to get long, I also noticed that the utprend was fading a bit, which is why I was willing to get out immediately when the price stalled near my target. I think you prefer trade the break of consolidation of several bars after a pull back, because it is safer and more profitable.

When using 5min or up chart, we can use the engulfing bar trade the break of the last bar of a pull back, rather than the consolidation of several sideway bar , because a 5min bar is actually the consolidation of 5 1min bars. So when we trade the break of a single bar in 5min, actually we are trading the break of a consolidation of 5 1min bars.

In 1min chart, since it is the lowest timeframe, it is better to trade only the break of a consolidation of several sideway bars, rather than the break engulfing of a single one bar. This is what I think, but want to know your explanation: I do prefer the consolidation method but still like engulfing entries…I will discuss those in a bit.

For most people the consolidation method is best, for one main reason: I have found it to be more reliable. This is the opposite of consolidation bars which are typically small, which allow us to place a stop loss closer to our entry point because the consolidation pattern is smaller than an engulfing pattern not always, but quite often. I do not like day trading with 5-minute charts, personally, although it is possible to do. On a 5-minute, compared to a 1-minute chart, you find fewer trades each day.

The 5-minute chart trades will last longer typically and the longer trades last the more likely volatility will die as the trades progresses, especially in trading during the US session. This means targets are less likely to be hit as the day progresses because you move out of the ideal day trading time after only about 40 to 60 bars depending on when you start trading. You have also lost a lot of information on a 5-minute chart.

A 5-minute engulfing bar CANNOT be assumed to be consolidation breakout on the 1-minute chart. Use the entry technique because there is a proper setup for it. So it takes practice to determine when you should trade engulfing patterns and when you should wait for a consolidation, which requires a keen understanding of Velocity and Magnitude, discussed in the eBook and here: So if an engulfing pattern shows up, I am taking it. Because it is only two bars, it forms quickly, and if you are eager to get into trades, engulfing patterns will give you lots of opportunities to do so.

The problem is that you still need to be looking very closely at price action and making sure the engulfing pattern is really telling you that a pullback is ending and the trend resuming. Since consolidations occur over more bars, you have a couple more minutes to analyze the trend and pullback, establish where your orders will go, work out if the reward warrants the risk, etc.

So basically I am saying the engulfing pattern is a bit more advanced in terms of turning the pattern into actual profits.

Multiple entry methods are discussed in my ebook and on this site, and they are all valid if used in the right context. After a pull back, should we always wait for a consolidation of at least 2 sideway bars; and then go long when the price breaks the high of the sideway consolidation?

If the price just pulls back, but never shows sideway consolidation, can we apply the engulfing bar technique? However, when you day trade EURUSD in 1 min chart, you say we should way for a consolidation of at least 2 bars you prefer 3 after a pull back. Thanks for your website and sharing all this valuable information freely with all of us.

Getting the perspective from a Consistently Profitable Trader is truly a goldmine. How do you know when to cut your losses before it hits your exit price reference: Would it be a good option to exit trades as soon as they came back inside the consolidation range and get right back in if it went back up over the next resistance instead of setting a stop loss underneath the range?

Would there be additional confirmation for you to trade this setup? I would think that if you want to have the highest probability possible for a profitable trade, that way of trading would be essential to have a chance of getting the bulk of the move wave 3 of 5 from Elliot Wave Analysis and not just the end of it.

I am always considering all the factors. Before each trade I decide how strong of a setup it is. So as I mention, on that first trade in the second chart, I only really had the false breakout to go off, and a bit of range support to push the price up. A very strong move basically trumps everything.

If the trend was down, but then price rocket higher, that is my focus likely! I am still keeping the whole day in perspective. I will then look to buy on a pullback once the price starts slowing down and moving back to the upside.

In this case, the strong move is telling me the trend is now up. Because of that, I am willing to step in with a trade if the pullback stalls out before reaching the point where the big move began.

So the confirmation in this case is the velocity and magnitude https: Nothing works all the time, but a strong move is a good indication of momentum, and I am willing to trade based on some of that momentum continuing after a pullback.

I will write an article on this. It worked out well. I had no real mentoring, and pretty much stick to my own research to this day. There are other good traders out there, but ultimately you learn that you are responsible for everything you do, so you better trust yourself, and that means putting in your own work and research. If I see a trade strategy or idea I like the look of, I look through charts and see if it is a viable approach. I basically do a manual backtest of it so see if it could be a successful approach or not.

So if you want to be hired in the finance industry, it looks good on a resume and it gives a broad background so you can sound smart.

But if you just want to be an independent trader, skip the designations. Spend that time on what really matters: Light bulb moments come in stages https: That basically made me a profitable trader because my losses are always capped, and the trades I take had more profit potential than the risk I was taking. I had fully accepted, after years, that my losses and wins both contribute my overall return, as so there was no reason to fight losing trades or try to eliminate them http: My trouble these days with breakouts the way I traded them was that price tends to decelerate after the breakout not always, but most of the time considering the location of price in the whole context of the trend and that left me anxious about my position, cutting early and not letting my winners ride.

Tweaking a little bit what I was making with this pullback method makes sense to me so thanks,. We always read how successful traders use volume with price action in their trading and I must say I tried it for a long time with mixed results thinking it was absolutely necessary.

Like you said, strong momentum seems more valuable info than actual volume prints, at least for forex. And you might not realize it but by giving us all this info, you are offering all of us great mentorship. I prefer making research on my own, thinking about the how, why, when and where. I find it sticks to me more when I do. Having your perspective was an added value in this case. I always prefer buying near support or shorting near resistance.

If there is a big pattern, instead of trading the breakout, let a breakout happen. If the price has a strong breakout, then it will likely continue in that direction. Watch for a pullback to near the original breakout point, and then enter on that pullback.

The price has already broken out and showed strong momentum in the breakout direction, so you are just trading a pullback, similar to a trend trade. I usually opt for this method on ranges and stuff like that especially big patterns, where a big move IS likely to ensue following a strong breakout …that way I avoid all the false breakouts and the battling that goes on near the breakout levels.

I covered this concept briefly in this article: Great tips you got here Cory. One key to making real money is to follow EXACTLY what worked before. There are so many strategies out there and some would think they fail if they followed that strategy and lost.

However, I find that your guide is easier to implement. Old traders like me can actually put a little twist to it and integrate our own strategies.

Sorry but Basics not understood. You have stressed in your e-book that it is preferable to use volatility for the day of the week Mon, Tue… etc. What time period is to be used In weeks on the Mataf chart. Changing the period Number of weeks on the chart gives a substantial difference in Volatility Pips for all the pairs. For those who are wondering, MM is asking about a strategy in the Forex Strategies Guide for Day and Swing Traders eBook.

There is no specific answer because conditions change, so you want to be using a daily range statistic that is relevant to the current environment. This is useful for giving a broad assessment of daily volatility, but using the chart on the right Volatility in pips EURUSD per day of week is a better gauge. That chart shows how many pips the price moves, on average, each day of the week. As for how many weeks you should use, this depends.

If you look at the daily chart and there were no crazy moves, then you can use a 5 or week average. BUt in June for example the Brexit vote happened which caused a huge ONE TIME spike in volatility.

So as of July 18 I am only looking at about 2 weeks of volatility—what has happened after the Brexit vote huge bar on EURUSD chart on June But when looking at only a couple weeks of volatility, you also need to consider any events that took place during that time, which could affect day of the week volatility.

So you need to remember that when looking at friday data. On a non-NFP fridays the volatility is more likely to be lower than the average daily range shown. This is why practice is imperative before risking real money.

On the other hand, if the price is not hitting your targets or moving WAY past your target , then you need to look at why, and adjust how you are assessing volatility. So most of the time, using a 5 or 10 week average of volatility will work well. But when a big event occur, which is unlikely to happen again but that spiked volatility, you need accommodate for that. Try to erase that event from your data by only looking at volatility before or after the event, but not including the event so that the statistics you are using better reflect what happens on a typical day.

Volatility is constantly changing— you want to be on top of that, so that your profit targets reflect what is reasonable for the market conditions. This is part of the practice I talk about early in the book…only through some trial and error will you get really good at this. If in doubt, always assume volatility will be a bit lower than your statistic, that way, your target is more likely to be hit.

It is kind of hard to catch the trend in the good direction. This would mean the profit made by a swing trader in 1 trade can also just as easily be made by a short term trader in 1 trade, and with a much smaller amount of time.

Also, what time interval do you consider long term vs short term vs scalping. In most of my demo trades, I hold the position for hours, and have open at once. How can I avoid this? There has to be software that exists to notify me when this is happening. There is no perfect way to trade. If you try to eliminate this you will likely end up also cutting off trades prematurely that would have hit your target.

You will always have a trade off. YOu can use some of sort trailing stop loss, but then you run the risk of prematurely stopping out trades that could go much further or hit your target. So it is easy to say in hindsight you should have gotten out, but could you have really known you had to get out in that moment?

If you can find some sort of reliable signal that tells you to get out, then use it. I use a couple things to aid in this regard though. I move my stop loss to breakeven. If the price gets very close to my target and then pulls away, I just close it out.

There is a no specific number of trades that is over trading or under trading where did I say trades was overtrading? No more trades, no less trades. The time frame you trade on is also personal. The samller the time frame the more information you receive, but some find this to be too much information, so they prefer using a 5-minute chart for example.

Day trading is more efficient. My aim then is to make 1. With a day trade I do that in 5 minutes, on a swing trade it takes 1, 2 or sometimes even 5 days to get the same return.

How long your trades last is also dependent on your strategy. When day trading the EURUSD I typically have a about a 5 pip stop loss varies based on volatility of the day and place a target at about 8 to 15 pips also depending on volatility and movement.

So those trades typically only take about 5 to 10 minutes to complete. But if you use a longer time frame, a bigger stop loss, and thus bigger targets, your trades will take longer. Question if you have a dollar account for a micro account.

You will need leverage. Some of the other comments touched in this. Not much need for more than that. If your stop loss is 10 pips, you can take 1. That transaction costs 15,, so you need at least With a 5 pip stop loss you can take 3 mini lots 30, , you need at least Using a micro account is encouraged for all smaller accounts under 10K , that way if you do any swing trading your stop losses can be a bit larger and you can trade micro lots.

For day trading I stick to the EURUSD most of the time. I do occasionally switch to the GBPUSD because it has a bit more volatility, but the EURUSD is the standard. Swing trading is different…for that I monitor loads of pairs because I can easily flip through the charts each night.

I swing trade when trades come up combinations of the AUD,CAD,USD,EUR,GBP,JPY,NZD as well as the some of the smaller currencies…total of about 46 pairs. I have the following questions about the two trading examples in this article. Kind regards, At de Jong. The main reason for these trades comes from the Velocity and Magnitude chapter. For both the trades you mentioned we have huge velocity and magnitude to the upside.

Those very strong moves shift the trend to up…because they create a significantly higher high can no longer be a downtrend. As you point, we should be waiting for a higher low to confirm the trend. But that is exactly what I did. I waited for a pullback, and then I waited for the pullback to stall out.

I then took a trade as the price started to rise again. By waiting for those small confirmations, I had both the higher high and higher low I was looking for. Instead, you only have a higher-high very strong ones and then in real-time need to be able to watch the pullback and tell yourself you will get in if it shows signs of making a higher-low stalls out above where the big move higher began.

Usually I DO prefer trading in a well established trend. YET, when you have a massive move either up or down, that has very strong magnitude velocity is a nice addition as well , that typically means the trend has reversed. Or it at least provides me with enough confirmation that I am willing to take a trade on the pullback that follows the big move assuming it stalls out and then starts to move back in the direction of the big move. Hopefully that helps clear it up. No chapter should be read in isolation.

All the chapters have been included for a reason. There are elements from each that will help you make better trading decisions.

Following a big move is one of those times. You may not have a typical trend structure, but the price action a very strong move tells us the trend has likely reversed, and by waiting for a pullback that stalls out before that big move began, we are in fact trading a trend…it is just the beginning of it.

With an 8 pip stop loss you can trade 2. If you buy 2. If you buy at 1. There is a big difference between the transaction value 25, in this case, for 2. How much you put at risk is up to you, and is based on your position size and how far you place a stop loss from your entry price. One small matter though: I must be missing something somewhere. I need to proof-read my comments more carefully.

Sorry for the confusion. I missed a zero and it threw off all the numbers in my prior comment. I have revised my prior comment with the correct numbers. Leverage is required, as you point out. I will need to look through the article to see if I linked to the Position Size article anywhere. If not, this article discusses Position Size in more detail: And managing each trade based on what price is doing rather than hoping it will just fit into our trade idea!

And that sounds like a great plan. It takes time to develop that skill—staying constantly focused and thinking ahead—but it will come. How to Day Trade the Forex Market In 2 Hours or Less a Day EURUSD Posted on November 24, by Cory Mitchell, CMT. Day Trading Forex — Basic Guidelines Becuase this is already an extensive article, links are provided to other articles with more information on given topics.

I opt to trade from 8: Really anytime while London is open is fine. Only trade in the direction of the trend. Wait for a pullback. Buy a breakout above the high price of the sideways bars. For example, on April 15 I opted to use a target of 14 pips and a stop loss of 8 pips. On April 14 I opted to use a 10 pip stop loss and a 18 pip target.

This changes over time. Things change, as traders we must adapt. Create a day trading routine to avoid mistakes. My target is likely to get hit, so I leave my stop loss where it is and if I get stopped out I get stopped out. It was worth the risk because everything is moving well. If the trend is very strong, I also decide before the trade if I am allowed to adjust my target or not. If I am allowed to increase my gain, where am I going to move the target to?

If I adjust my target, and then price pulls back from it, do I get out or let it make another attempt at the new target? Decide what you will do before the trade is even placed. Maybe 1 in 10 trades is worth adjusting the target for. If a target is approached, and just barely missed, I usually close the trade immediately.

Never let a trade that almost hit your target turn into a loss. Say the trend is up, and we just a had a very deep pullback, retracing all or most of the prior up wave. Therefore I will buy to capture any remaining upside momentum, but if the price shows any weakness once I am in the trade I will exit immediately.

For example, if things look pretty good, but not ideal, I will allow the price to make three attempts to move in my direction.

I may also opt to give it only two chances to go in my favor if the setup is lightly less favorable trend not as strong. If the trend is likely over but you are squeezing the last bit of juice out, or if the trade is at an inflection point which could go either way, only give it one attempt. If it moves in your direction and then falters, bail immediately. It is probably a false breakout. You get stopped out. When we take a trade we need to let it make at least one attempt or more in our direction before bailing on it.

If you find this happens to you often, you need to work on entries because something is wrong. How to Day Trade the Forex Market — Trade Examples Here is the April 14 EURUSD 1-minute chart, along with comments below. How to day trade the forex market — EURUSD click to enlarge.

November 1, at Cory Mitchell, CMT says: November 23, at August 26, at So, the engulfing bar technique is better being used in 5min or up chart. August 10, at Last night August 9 I saw a up trend of GBPUSD from As always, thank you! July 28, at Hi Cory, Thanks for your website and sharing all this valuable information freely with all of us. I have a couple of questions about trading in general that could apply to this strategy, 1. Do you use volume with price action in your forex trading and if yes, how do you use it?

Anyways, thanks a lot for your time and energy in this industry. I really appreciate it. Wishing you a great day. July 29, at Thanks for taking the time to answer in so much details.

Good trading mate, Eric. July 30, at Basically, I just avoid trading breakouts in the typical way, and use these approaches instead. July 27, at July 18, at June 21, at June 3, at June 4, at April 4, at April 5, at Is that just for mini or can you still use that for micro as well?

You can trade micro lots at well. March 31, at Kinda off topic but do you trade 6 pairs of you do can I ask which ones you trade? But for day trading…just the EURUSD, and occasionally GBPUSD. March 30, at March 28, at Thanks Cory, your explanation really makes great sense.

April 11, at November 16, at August 16, at This is good stuff. Simple, to the point, and most of all…. July 26, at April 16, at Leave a Reply Cancel reply document. Sign Up for Our Free Trading Newsletter. How to Day Trade Stocks In Two Hours or Less Extensive Guide How Much Money Do I Need to Trade Forex? Why Most Traders Lose Money and Why the Market Requires It Day Trading Stock Picks for Week of June Trading Courses Trading Tutorials Free Trading eBooks Canadian Investor Forex Stats About Us.