Day Trading Strategies
Profit from intraday price movements with proven strategies and strict risk management
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
Setup Process:
- 1.Mark first 15-30 min high and low
- 2.Wait for price to break and hold outside range
- 3.Enter on retest or momentum break
- 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
Setup Process:
- 1.Identify VWAP as dynamic support/resistance
- 2.Buy pullbacks to VWAP in uptrend
- 3.Short rallies to VWAP in downtrend
- 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
Setup Process:
- 1.Scan for >4% gappers with catalyst
- 2.Wait for flag pattern after open
- 3.Enter on flag break with volume
- 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
Setup Process:
- 1.Identify overextended moves (>3 ATR)
- 2.Look for reversal candles at levels
- 3.Confirm with divergence or volume
- 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
Setup Process:
- 1.Use 1-min chart with 9/20 EMA
- 2.Enter when price breaks above EMAs
- 3.Exit on first sign of weakness
- 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
Setup Process:
- 1.Identify strong directional move (pole)
- 2.Wait for controlled pullback (flag)
- 3.Enter on break of flag with volume
- 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
> 1:1.5Average profit vs average loss
Why it matters: Good R:R allows profitability with <50% win rate
Profit Factor
> 1.5Gross 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