15 Price Action Patterns Insiders are Using If a hedge fund managers were using 15 specific price action patterns would you want to know?

Welcome to the world of Forex trading, where the right strategies can unlock significant opportunities. Today, we’re exploring the Daybreak Strategy, a straightforward yet effective approach tailored for both seasoned and those seeking trading advice for beginners.

Last month, we discussed a price action strategy (I’m partial to price action strategies using naked” charts) using pin bars. While I like that strategy and will continue to use it, it requires the trader to be attentive to every chart at each hour of the day. That doesn’t work well for me, as I like to be “done” by 11 AM NY Time, and many of the good trades come after that.

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This method simplifies the trading process, allowing you to make the most of your time and resources. Whether you’re new to the trading scene or looking to refine your techniques, the Daybreak Strategy offers a unique blend of simplicity and effectiveness designed to enhance your trading journey.

Let’s dive into this strategy and discover how it can streamline your trading experience.

The Daybreak Strategy

The Daybreak Strategy allows you to look at the charts once a day, set up the trades, and walk away if you want. I actually watch them a little better than that, only because I don’t want to be in the money and then stop out with a loss.

Find a pair for which there is no red-tagged news anticipated for the remainder of the day. Look at a 15-minute chart of your chosen pair around 9 AM Eastern US Time (GMT -5).

Be sure the “period separators” are enabled to make it easy to find the beginning of the day (Charts/Properties/Common/Show period separators.) The first step with our strategy is to determine if the pair is trending or ranging.

If the pair is trending, pass on it for the purposes of the Daybreak Strategy. We’ll discuss a strategy for the trending pairs later.

Daybreak Strategy: Aud/Usd Trending — Aud/usd trending (20 sep 17)

Daybreak Strategy: Eur/Usd Ranging (20 Sep 17) — Eur/usd ranging (20 sep 17)

Setting the Daybreak Strategy Orders Using a Position Size Calculator

Using a position size calculator, determine your risk and calculate your trade size based on a 10-pip stop. Place a sell-stop order one (1) pip below the LOD and a buy-stop order one (1) pip plus the spread above the HOD.

If you do not include the spread on the buy-stop order, the order will trigger before the chart price pushes above the HOD (assuming an MT4 bid-type chart.)

Placing A Sell-Stop Order. — Usd/jpy orders

I set the expiry for the orders at 5 PM NY Time. Use a 10-pip stop loss and a 30-pip take profit for the trade. At this point, you can just walk away from the trade and let it run.

Taking Profit

If I’m around, as with most of my strategies, I lock in the trade at +10 pips (take a portion off to cover trading expenses and set the stop loss on the rest to break even.) As always, if the price action nears the take profit level, I will usually close it early.

In the meantime, feel free to check out our article on the best breakout trading strategy!

I use this strategy on all the major U.S. pairs and some of the major crosses. Moreover, I try to keep the pair count smallish and only allow a couple of trades to trigger each day.

If I risk ½% on each trade, then I can expect a 1% to 1.5% profit per trade. That way, I can easily hit my goal of 1% gain/day with one winner and come close to my goal with one winner and one loser. If I get three losers in a day, I shut the rest of the orders down and don’t trade any more that day.

Standard Trading Advice for Beginners

As with any trading strategy, remember, never bet the farm. No single trade should be big enough to make or break you as a trader. Protecting your trading account is your first job as a trader. Without it, you’re done.

The only way you can be a full-time professional trader is to manage your risk like a professional. If you want to learn how to do this, make sure to check out our training session.

Always have a plan. A plan to get in, a plan to get out, a plan for a win, and a plan for a loss. Follow your rules. Discipline, discipline, discipline.

I know you regular peeps are probably tired of hearing this but do it anyway.

Conclusion

The Daybreak Strategy stands as an exemplary approach for those venturing into the dynamic world of trading. It’s particularly beneficial for beginners seeking solid trading advice, offering a clear, structured method to navigate the markets.

This strategy emphasizes efficiency and effectiveness, allowing traders to make informed decisions with a daily assessment. For beginners, it serves as a foundational technique to build upon, fostering confidence and skill in the trading arena.

Embrace the Daybreak Strategy as your stepping stone into trading, where simplicity and strategic planning pave the way for potential success. Remember, every successful trader starts with a first step.

Thank you for reading!

Please leave a comment below if you have any questions about this strategy!