Novice traders should not trade below H4 charts with it. It does not provide exit points: the trader best intraday forex manage and exit trades based on his best judgement. The Day Trading indicator detects price reversals in a zig-zag fashion, using only price action analysis.
It has been specially designed for scalping intraday charts, without repainting or backpainting at all. Based on breakouts and congestion zones of variable lengths, the indicator uses only price action to pick trades and reacts to the market extremely fast. This indicator will help intraday traders not to miss a single price reversal. However, not all price reversals are created equal and the quality of each one of them as a breakout varies.
Scalping in a nutshell The Day Trading is a relatively complex indicator that relies on variable length breakouts and congestion zones on donchian peaks or bottoms, but it keeps the nitty-gritty stuff for itself. All you need to know to trade it is the following. Sometimes you will bump into losing trades, which are almost always caused by sudden spike bars with long wicks against the trade direction. Because volatility decreases as you go up in timeframes, trading H1 and H4 charts will yield the best results. How to interpret the stats The indicator studies the quality of its own signals and plots the relative information on the chart. Every trade is analyzed and the overall historic results displayed at the top-left corner of the chart. The MFE is the best possible outcome for any given trade.
The average MFE is displayed at the top-left corner of the chart. The MAE is the worst possible outcome for any given trade. The average MAE is displayed at the top-left corner of the chart. The AAE is the absolute excursion you can expect for any given trade, obtained by subtracting the MAE from the MFE, which reflects the true quality of the entry strategy. In other words, the entry strategy is measured by the relationship between the average best possible outcome and the average worst possible outcome. Finally, losing trades are not hidden but highlighted and accounted. Looking at them regularly might help you to avoid losing patterns in the future.
Timeframe selection is key Most brokers lure novice traders into scalping small timeframes, with the implicit argument that more trading frequency translates into more profits. But nothing can be further from the truth. Most traders don’t lose their bankroll to the market, but to the broker, and end up asking themselves what went wrong. Cost per trade, to avoid trading timeframes in which the mathematical expectation of your trading is negative. If you are a novice trader, you should seriously consider trading daily charts or H4 charts, in which the transaction costs are reduced to a minimum in relationship with the potential profits.