Day trading the DAX (DE40) on the 15-Minute chart.
We finally saw a break-out to the downside yesterday. Price was bouncing between support and resistance for quite a few days and we were looking for some sort of break-out to happen either to the upside or the downside.
Looking at the chart, we can see that price broke to the downside through that support level.
This was a fantastic entry using the 15-minute scalping strategy. You can see that the moving average cut right through the top part of the break-out candle. This is what we need to identify when looking for these entries. The impulsive candle closed below support and a market order was opened up as soon as that impulsive candle closed.
Our place out stop loss ten pips above the top of the impulsive candle. We always look for a risk to reward of one to two when scalping using this particular setup. We can see that price took around 18 hours to reach the target.
This is an example of practicing patience. Even when scalping in such a low time frame, the price can take some time to reach targets. The only way to have the confidence to not exit these positions when the price takes a while to move towards your targets is by practicing these strategies over and over. How do we do this? Simple, we backtest. We go through months and months of price action and trade this exact strategy over and over until we become comfortable. After a while, we will then be able to spot these impulsive candles more easily. Our eyes will naturally begin to look for them and it will become second nature.
An example of another breakout candle that never reached target can also be seen on the chart. I have highlighted this candle in red. The reason why this candle could not be considered a good entry was because of the way the break-out candle was formed. Notice how the top part of the candle is just a wick. So even though the moving average cuts through the top of the candle, it is cutting through the wick. Remember, we like to see the break-out candles be more solid. Entering on a candle like this is not a good setup even though it broke support. This is a great example of what not to do.
My advice to those wishing to start using this strategy is to just practice until you become used to this idea. Good luck!
The Vortex Trader.
Prediction Analysis Overview Table
|Analysis Overview Information||Prediction Analysis information|
|On what market is this position based (Forex, Stocks, Crypto, Indices, or Commodities)?||Indices|
|What is the trading position identifier (Name and/or Symbol)?||DAX 40|
|Is this a Short or Long Position?||Long|
|Would this be considered a Short Term, Medium Term, or Long Term trade?||Medium Term|
|As a Short, Medium, or Long Term trade, which best describes the position (Scalping, Day Trading, Swing Trading, or Position Trading)?||Swing Trading|
|What Time Frame chart is the position based on (1-Minute, 5-Minute, 15-Minute, 30-Minute, 1-Hour, 4-Hour, Daily, or Weekly chart)?||15-Minute|
|Depending on the asset, how much do you expect it to move in price or percentage?||From Entry to Target – 2%|
|What ratio of risk to reward is this trade/position? Choose your appropriate target(s)||Approximately 2 to 1 Target 2 N/A Target 3 N/A|
|What were the technical analysis tools used? Tick the appropriate boxes;||☒ Chart Patterns ☐ Indicators ☒ Price Action ☒ Support & Resistance ☒ Trendlines|
|From the technical analysis tools and indicators provided, tick the appropriate boxes for the tools and indicators used to analyze the position;||☐ Ascending Triangle, ☐ Bollinger Bands, ☐ Candlesticks, ☐ Channel, ☐ Cup & Handle, ☐ Descending Triangle, ☐ Double Bottom, ☐ Double Top, ☐ EMA, ☐ Fibonacci Retracement, ☐ Flag, ☐ Head & Shoulders, ☐ MA, ☒ MACD, ☐ Order Blocks, ☐ Pennant, ☐ Rounding Top Or Bottom, ☐ RSI, ☐ Symmetrical Triangle, ☐ Volume, ☐ Wedge|
Disclaimer: The FSP probability score is derived from adding and subtracting the positive and negative aspects of the position and is not a definitive sign of how the trade will play out. FSP is not in any way a financial advisor