Day Trading Strategies

Profit from intraday price movements with proven strategies and strict risk management

6.5 hrs
Trading Day
1-2%
Daily Goal
$25k
PDT Minimum
0%
Overnight Risk

Pattern Day Trader Rule (PDT)

US traders need $25,000 minimum to day trade more than 3 times per 5 business days. Alternatives include: cash accounts, futures, or offshore brokers.

90% of day traders lose money. Only trade with capital you can afford to lose.

Proven Day Trading Strategies

Opening Range Breakout (ORB)

Trade breakouts from the opening range high/low

First 15-30 minutes

Setup Process:

  1. 1.Mark first 15-30 min high and low
  2. 2.Wait for price to break and hold outside range
  3. 3.Enter on retest or momentum break
  4. 4.Stop loss at opposite side of range

Performance Metrics:

  • Best For:Trending days, high volume stocks
  • Win Rate:45-55%
  • Risk/Reward:1:2 to 1:3

VWAP Trading

Trade reversions and breakouts from VWAP

All day

Setup Process:

  1. 1.Identify VWAP as dynamic support/resistance
  2. 2.Buy pullbacks to VWAP in uptrend
  3. 3.Short rallies to VWAP in downtrend
  4. 4.Use with volume confirmation

Performance Metrics:

  • Best For:Large cap stocks, ETFs
  • Win Rate:50-60%
  • Risk/Reward:1:1.5 to 1:2

Gap and Go

Trade continuation of pre-market gaps

Pre-market to 10:30 AM

Setup Process:

  1. 1.Scan for >4% gappers with catalyst
  2. 2.Wait for flag pattern after open
  3. 3.Enter on flag break with volume
  4. 4.Trail stop below moving average

Performance Metrics:

  • Best For:News-driven stocks, earnings
  • Win Rate:40-50%
  • Risk/Reward:1:3 to 1:5

Reversal Trading

Fade extreme moves for mean reversion

Mid-day to close

Setup Process:

  1. 1.Identify overextended moves (>3 ATR)
  2. 2.Look for reversal candles at levels
  3. 3.Confirm with divergence or volume
  4. 4.Quick profit targets

Performance Metrics:

  • Best For:Volatile stocks, indices
  • Win Rate:55-65%
  • Risk/Reward:1:1 to 1:1.5

Momentum Scalping

Quick trades following short-term momentum

1-5 minute charts

Setup Process:

  1. 1.Use 1-min chart with 9/20 EMA
  2. 2.Enter when price breaks above EMAs
  3. 3.Exit on first sign of weakness
  4. 4.5-10 cent profit targets

Performance Metrics:

  • Best For:High liquidity stocks
  • Win Rate:60-70%
  • Risk/Reward:1:1

Bull/Bear Flag

Trade continuation patterns after strong moves

Any during day

Setup Process:

  1. 1.Identify strong directional move (pole)
  2. 2.Wait for controlled pullback (flag)
  3. 3.Enter on break of flag with volume
  4. 4.Target pole length projection

Performance Metrics:

  • Best For:Trending stocks
  • Win Rate:50-60%
  • Risk/Reward:1:2 to 1:3

Day Trader's Schedule

Pre-Market Prep

8:00 - 9:00 AM
  • Review overnight news
  • Check pre-market movers
  • Identify key levels
  • Create watchlist

Final Preparation

9:00 - 9:30 AM
  • Set alerts on key levels
  • Review trading plan
  • Check economic calendar
  • Mental preparation

Opening Session

9:30 - 10:30 AM
  • Trade ORB setups
  • Monitor gap stocks
  • Execute planned trades
  • Manage early positions

Mid-Morning

10:30 - 11:30 AM
  • Look for trend continuation
  • VWAP trades
  • Manage open positions
  • Adjust stops

Lunch Period

11:30 - 2:00 PM
  • Reduced activity
  • Position management only
  • Prepare for afternoon
  • Review morning trades

Afternoon Session

2:00 - 4:00 PM
  • Power hour setups
  • Reversal trades
  • Close all positions
  • End of day analysis

Key Performance Metrics

Win Rate

> 45%

Percentage of profitable trades

Why it matters: Higher win rate reduces psychological pressure

Risk/Reward

> 1:1.5

Average profit vs average loss

Why it matters: Good R:R allows profitability with <50% win rate

Profit Factor

> 1.5

Gross profit / Gross loss

Why it matters: Measures overall strategy effectiveness

Max Drawdown

< 10%

Largest peak to trough decline

Why it matters: Risk management and capital preservation

Essential Day Trading Rules

Risk Management

Never risk more than 1-2% per trade

Reason: Preserves capital for long-term success

Daily Loss Limit

Stop trading after 3% daily loss

Reason: Prevents emotional spiral and revenge trading

No Overnight Positions

Close all trades by market close

Reason: Avoids gap risk and overnight news

Trade the Plan

Only trade pre-planned setups

Reason: Eliminates impulsive decisions

Position Sizing

Size based on stop loss distance

Reason: Consistent risk per trade

Journal Everything

Document all trades with screenshots

Reason: Continuous improvement through analysis

Essential Tools & Platforms

Charting

  • TradingView
  • Thinkorswim
  • TC2000
  • eSignal

Scanners

  • Trade Ideas
  • Finviz
  • TradingView Scanner
  • Benzinga Pro

News

  • Benzinga
  • Bloomberg Terminal
  • Reuters
  • Twitter/X

Execution

  • DAS Trader
  • Sterling Trader
  • Lightspeed
  • Interactive Brokers

Day Trading Psychology

Mental Preparation

  • • Start each day with clear mind
  • • Accept losses as business costs
  • • Focus on process, not P&L
  • • Take breaks when frustrated
  • • Celebrate discipline over profits

Common Pitfalls

  • • Overtrading when up or down
  • • Revenge trading after losses
  • • FOMO on missed moves
  • • Holding losers too long
  • • Increasing size too quickly

Getting Started with Day Trading

📚

1. Education

Learn strategies, risk management, and market mechanics

💻

2. Simulator

Practice for 3-6 months with paper trading

💰

3. Small Size

Start with minimum position sizes

📈

4. Scale Slowly

Increase size only after consistent profits

Day Trading Resources