Making trading with the strategy on the closure of the previous day is one method I prefer. For what reason? Because it is a trading strategy that works for my way of trading. As you well know, not all strategies work or in any case are good for all traders. For example, I do not like too large stop losses and this involves a consequent choice of strategies capable of reducing my risk to the minimum possible.
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As you well know, not all strategies work or in any case are good for all traders. For example, I do not like too large stop losses and this involves a consequent choice of strategies capable of reducing my risk to the minimum possible.
The trading strategies with tight stop loss, are often scalping strategies . However, my intention is yes, to minimize the costs of my trading, but also to maximize my earnings.
That’s why, in addition to using the techniques of winning traders that can be for me, I try to adapt them to me in this way:
- I open every trade in scalping, this means that I use stop loss of a few points and realize my first profit after 10 or 20 points at most;
- then I convert my trade from scalping to intraday (and sometimes multiday) trading without more risk, moving the stop loss beyond my entry and letting any profits run.
If you don’t know how to close half position on MT4, see this article.
I don’t know if this way of trading can be useful for you too, but that’s what I do and I started seeing the best results just like that. For what reason?
Because I feel more comfortable taking a part of the profit as soon as possible and canceling the risk for the remaining part of the position.
I have probably already told you about my risk aversion and emotionally it was my Everest to climb in trading . Fortunately, thanks also to the indications of those who knew more than me, this method helped me to take one step after another more easily.
Returning to the trading strategy on the previous day’s closing, it is one of the trading methods that I prefer precisely because it guarantees me a short stop and possibly a profit higher than my expectations after the first target. However, before being applied in real life, do your demo tests to see if it can be the right trading strategy for you too..
Previous day closing strategy
Actually I did 2 operations with the same technique, but I only have images of the second. With this technique, in fact, after having identified the point, it is easy to go and return on the same financial instrument. The first was in scalping, long, with a fixed target on the close. The second, on the other hand, is short from closing to “towards infinity and beyond”! I watch too many cartoons, I know. 🙂
Seriously, the first trade in fixed target scalping was opened for 5 minutes. I waited for a signal that would give me a way to go higher to return to the level of the previous day’s close (orange line).
The second bearish trade, but this time with a double target. Within short when the price exceeds the high of the previous bar on 5 minutes and then goes back down and exceeds the close of the previous bar, obviously all on the level of the previous day’s close. The first target is above the low of the day so far, . While the second target is another short support, reached during the Wall Street opening.
Note how the price returns several times towards the close of the previous day. In fact, other trades could be made in scalping or everything could be managed differently. Because always remember that there are no mathematical rules to take advantage of this trading strategy , as well as no other discretionary trading technique . The only rule is observation. Also because each currency pair behaves differently than another, so a very flexible approach is required.
That’s why I invite you again to test in demo what I show you and arrive in real only when you have constant good results.
In this period I have received many messages and I am really pleased that, in my small way, what I show can be useful even only to some of you. I will try to answer everyone.