Unlike typical trading, professional trading is governed by the rules set by the professional trader. A professional trader is the one who considers the Relative Strength Index (RSI) indicator and utilizes it in an extremely unique way. Three of the notable Professional trading strategies are outlined below. Pick the one that best suits you.
- 80-20 strategy for day trading
- The Holy Grail trading strategy for any market and Trading Forecast (TF)
- Three Little Indians trading strategy
Let’s move on with the explanation of each strategy.
1. 80-20 trading strategy
A simple price chart formation is basically the essence of this concept. The strategy follows the idea of the candlestick pattern that signals the market reversal. The candlestick bar is usually with a long body containing a small wick. This strategy is devised with some of the professional rules as follows:
- 80% of the total candlestick size must be taken by the candle body
- Candle wicks must establish less than 20%
- The candle lit will lower down with what you have bought once the market breaks above the momentum
- With this scalping approach, take quick profits
Bear in mind that this strategy is best suited for the futures market. However, smart traders can work out a few discrepancies to make it work in their favorite market such as stocks or forex.
2. The Holy Grail strategy
This is an indicator-based professional trading strategy. This strategy uses the following patronage professional tools:
- Average Directional Index (ADX) indicator
- 20-period moving average
The following simple trading rules are for buying signals:
- ADX needs to break more than 30 and must rise.
- Stand by for price to retest the moving average of 20-periods.
- Following the price traces and the 20-period moving average, set down a buy order above the high of the candle.
- When the order is filled, set down a protective stop-loss order which must be beneath the swing low that has just formed.
- Make a trajectory of your SL to get an idea of profits or take advantage of the most recent swing high.
Let us now outline one of the most profitable trend reversal patterns in professional trading strategies.
3. Three Little Indians trading strategy
No professional trading indicators are required in this technique. This is purely a price action trading strategy. The set of rules of this strategy are quite simple and are based on sell signal. Let’s dive in:
- First and foremost, you must have three consecutive symmetrical peaks. In other words, swing highs.
- The time elapsed between the evolution of each swing high is almost the same.
- When the market turns below the 20% range of the second peak, enter a petite position.
- Locate your protective stop loss above the swing high which has just been formed.
In all honesty, we want to forestall when the third swing high will shape up. Our profit margins will diminish if the wait is too long. Remember that this pattern of graphical representation is as efficient to work on the daily chart as it works on the lower time frame.
In conclusion, these professional trading strategies or techniques need to follow some performance-based regulations. You must know how to identify your strengths and make the most of your trades. Most importantly, take one good trade at a time. Traders are successful in the market because they adopt one trading strategy at a time. Keep in mind that many are called, however, only a few are chosen. Become a member of Rich Picks Daily by clicking here.