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Simple Day Trading Strategy

Trading should be simple, the simpler you can make it the easier it is to master. What I am going to show you in my “Simple Day Trading Strategy” is about as simple as it gets. I have researched many methods over the years, ones that I paid for and ones I found on the internet for free and none have worked quite as well as this.

That’s not to say other methods don’t work but I don’t have time or the desire to sit in front of a computer screen all day taking trades that these other methods usually require.

Being a trader for quite a few years I have noticed a pattern that really works and it has only 2 entry rules. I only use it on the stock indexes the SPY, DIA and QQQ.  Individual stocks are too volatile and give too many false entries.

I personally prefer using this with futures: the NQ, ES and YM. There are a few reasons for this. The leverage is awesome; it only takes about $6,000 to control about $100,000 or the equivalent of 500 shares of the SPY.

Also the futures trade almost 24 hours a day so when I look a the the market at 9:30 the chart has the overnight trading on it.  Many times there is a trade at the open when the market retraces to touch the 20 SMA. If you trade only the stock indexes you will most likely have to wait awhile as there is usually a gap between the close of the previous day and the mornings open.

So here are the 2 entry rules:

  1. 20 period SMA on a 15 minute chart is pointing up
  2. Buy when the index touches the 20 period SMA

That’s it, when the two conditions are met you buy at the market. As soon as you are in the trade you put in your stop loss. I like to risk no more than 3 points in the ES or about $150. If I were to trade the SPY I would risk no more than 30 cents for the same $150.

Your exit will be a trailing stop below the 20 SMA and some logical support level. So either you will get stopped out during the day while locking in profits or you close your position out at the end of the day and take profits. If the market closes strong you may want to think about holding overnight. This will be determined by how confident you are in the position, trading account size and risk tolerance.

Here are some examples of trades I have taken:

Day Trade on the ES:

ES Trade Using Simple Day Trading Strategy

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Day Trade on the YM

YM Trade Using Simple Day Trading Strategy

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Day Trade on the ES (From my Phone)

ES Day Trade Chart

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Day Trade on the NQ (From my phone)

NQ Day Trade Chart

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As you can see my simple day trade strategy is easy enough to trade from your phone. As long as your phone app allows you to add a moving average your good to go. This simple day trading strategy works just as well for going short as well. You just reverse the rules; you want to 20 period SMA trending down and then sell the index when it touches the SMA.

If you are looking for more day trades, Luke Murray who is the head day trader at Jason Bond Picks gives out 15-30 trades over the course of the day. You can read my review of Jason Bond Picks here.

You will also need a good brokerage, I use OptionsHouse, you can read my review here.

Regardless of which Stock Picking Service you use or if even if you choose to go it alone, please download my two trading guides; 7 Habits of Millionaire Traders and How to Take the Proper Size Position for Your Account

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If you have any questions about Jason Bond Picks or any of the other stock picking services, feel free to contact me and I will get back with you as soon as I can.

– Robert Walsh