The Moving Target Strategy
The majority of Forex traders only focus on their entry techniques. They don't realize getting out of the trade is probably more important. The moving target strategy is a response to this trading fallacy that has blinded so many traders.
Before we begin to outline this powerful day trading target strategy, we would like to remind you to visit our website, TSG, and download your free Bitcoin Cash trading strategy.
If you think about it, where you take profits should be as important as your entry method. If you want to make money trading, you have to know where to exit your trades in profits. Otherwise, it will be hard to make money trading in the long run.
Professional traders place more weight and attention on the exit strategy. This is because that is how they make money. This is one of the oldest trading secrets that smart money doesn’t want you to know.
Now, it’s the time to switch your focus from your entry technique and use our powerful day trading target strategy so you can bank those desired profits. You can also read our best fractal trading strategy.
Moving forward, our team at Trading Strategy Guides will reveal our favorite exit strategy. We named this strategy, The Target Trading Strategy. It can be used to trade any type of market from stocks, cryptocurrencies, or Forex currencies.
Also, read my personal trading plan reviewed by Kimm Krompass. It is a Powerful Day Trading Target Strategy.
Powerful Day Trading Target Strategy
Warning! Our target trading strategy doesn’t require the use of any type of technical indicator. You need the price chart to trade with the moving target strategy successfully.
This powerful day trading target strategy will help you manage your winning positions to maximize your profits. You maximize your trading profits by riding the trend all the way until it starts fading away.
The moving target strategy can be used on any time frame, and you can adjust it even for short-term trades.
We’re going to demonstrate step-by-step how to implement this exit strategy. You can get a good feel for how it works with real live trades. Once you begin to understand how hedge funds and large traders exit the market, your trade profits will grow bigger. Also, read trading discipline which is also a most important skill for successful trading.
Note* Remember to pull out a piece of paper and a pen to write down the exit strategy rules. For this article, we’re going to look at the buy side.
Step #1: Use your preferred trade entry strategy. A breakout strategy works better with our target trading strategy
The first step is to enter the market.
Since our powerful day trading target strategy is an exit strategy, you can employ your preferred trade entry strategy. Our team at TGS has toughly backtested this exit strategy and found out that by using a breakout trading strategy, the accuracy of this method increases considerably.
Note* If you want to learn what goes into backtesting, please check out our essential guide to backtesting a trading strategy.
The rectangle chart pattern is one of the most effective price patterns for trading breakouts.
The rectangle pattern highlights the battle between the bulls and the bears very well. Inside the rectangle trading pattern, there is a consolidation that shows that no one is really in control of this market, nor the bulls or the bears.
As more stops build up above/below the rectangle pattern the more critical these levels become for the institutional traders who need the liquidity provided by these orders to execute their big trades.
When the breakout happens, the momentum will precede price, and if real buying power is behind the breakout, the trend will resume.
How to draw the rectangle pattern?
Two requirements need to be satisfied to be able to draw the rectangle formation:
- First, we need an established trend because the big money is made when it’s used as a continuation pattern.
- Secondly, we need to have at least two equal (or near the same) lows and highs to draw two horizontal lines at should contain the price action.
Note* We’ll demonstrate this powerful day trading target strategy on a recent trade so you can see how the exit strategy works on a life trade.
In the figure below, we can see the EUR/USD is in a strong bullish trend, and it starts developing a rectangle pattern.
The first step is to enter the market when the breakout happens. We wait for the daily close to confirm the validity of the breakout. The entry and exit strategies for day trading are quite simple.
After our order got triggered, we have to let the market do its job and do nothing.
This brings us to the second step:
Step #2: Leave the market work for five consecutive trading days
It’s somewhat unusual for traders to give the market the necessary time to develop a trend, but it’s the right thing to do because that’s how hedge fund managers approach the markets.
At this stage, you’ll have to rely on your initial stop loss to manage the risk.
Note* We recommend to avoid the natural impulse to do anything during the first five trading days.
However, before we leave the market do its job we need to establish for our take profit strategy is where to place our protective stop loss.
See below …
Step #3: Place protective Stop Loss 10 pips below the breakout candle
Place your protective stop loss 10 pips below the breakout candle. We’ve added a buffer of 10 pips to protect ourselves in case of any false breakouts.
This is a very reliable strategy to manage your risk because the moment the breakout candle low is penetrated we know with certainty that we’re on the wrong side of the market. In this case, you want to liquidate your position.
Last but not least, we also need to define a take profit level for our exit strategy which is the main thing of the moving target strategy.
See below …
Step #4: The Moving Target Strategy Takes Profit when the market makes a 10 day low
After we’re in a trade and we have past five trading days, we start counting 10 days back each trading day. When the market makes a new 10 day low, we close our trade in profit.
This is an excellent trading method to ride the trend and maximize your day trading daily profit. The Moving Target Strategy can be used as a universal Forex take profit strategies.
If you switch each trading day for each trading bar, you can then apply the target trading strategy to day trading as well. Your day trading profit target will be the same.
You can also call this strategy as the 10 day breakout strategy. You only need basic technical analysis skills to implement this simple trading strategies and earn a high day trading success rate.
Note** the above was an example of a BUY trade using the 10 day breakout trading strategy. Use the same rules for a SELL trade – but in reverse. In the figure below, you can see an actual SELL trade example.
In the second example, we’ll demonstrate how to apply the exit strategy with a day trading strategy.
Conclusion – Target Trading Strategy
Our exit strategy is designed to capitalize on strong market trends that have continued momentum. The big hedge funds and institutional traders only need 1 or 2 big trades per year to achieve their profit targets. Hedge funds look for trades that can keep it for months as this is where big money is made. Also read how to make money trading.
A strong trading market doesn’t produce significant retracements, and the target trading strategy can help you ride those trends so you can achieve your profits targets as well. You can easily make a minimum of 1 percent a day trading our powerful exit strategy.
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