You May Also Trade The Daily Charts Successfully Not Just Intraday Charts - Successful CTCN Trader
For Those Who Want To Trade The Daily Charts - These signals: the bull and bear hook and the reversal bar work on the daily charts as well. There is a difference though in execution and volatility and market trends.
Daily bars tend to gap a lot on opening above or below the previous day's high or low. Also, the volatility on the daily bars will not be anywhere near the S&P 500. So you will be getting less bang for your buck, and the daily charts will not trend as well and as long as the intraday S&P 500 relatively speaking. With that in mind, there is still good money to be made. I believe you have to treat it a little bit differently. So here are some general guidelines that will work very well to get you started. These are only guidelines and you can modify them to suit yourself.
The way I would try to trade the dailies, is that I would look for a decent trend to develop. Get in on the pullback using one of our two types of entries, and then look for a quick 3 to 4 day pop in our direction and then exit.
So try this:
1.
Enter about $50 above or below your signal bar whichever way your trading (allow up to $150 limit on order for gaps)2.
Initial stop (or risk): 75% of signal bar3.
Then use a one bar trailing stop ($50 to $100)4.
Exit on the fourth days' close5.
Have a profit target of say $1250 in market each day with an O.C.O. order in with your trailing stop.You may ask why I would use a profit target. Well on daily charts that's a pretty good move in most markets inside of 4-days of being filled and most trades off the dailies will average about $300 of risk, so this will give you a 4 to 1 risk reward ratio which is not bad if you can get it. Remember, these are just guidelines.
For those who want to be quite mechanical and cannot watch the market during the day, these rules should work very well considering you take reasonable trades in trending markets. Be picky about the trade selection and markets you trade.
Since most daily markets these days do not trend as long and as frequently as in the past, you want to take the quick 3 to 4 day moves and move on. I would recommend you look at 8 to 10 markets and that is all. There's plenty of money to be made in that many. You do not and should not watch 23 or more markets. Stay away from orange juice, lumber, silver, gold, soybeans, sugar, pork bellies, sugar and cocoa.
The markets that trend best and work the best from my observations are the following: Wheat, Cotton, Coffee, Copper, Crude Oil, Heating Oil, Treasury Bonds, Treasury Notes and Eurodollar. The currencies trend wonderfully off the dailies, but the gaps every day can be stomach churning along with sleepless nights and weekends. If you don't mind big risk and big gaps you can trade these.
There are some tremendous moves, but can you really stay in real-time? Only you can answer. I can tell you up front that I cannot and will not. I like the short-term, low risk type trading. These other markets will give you something of that nature for those who can't watch the markets intraday.
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