Discover the secret behind the 15% of day traders who thrive in a market where many falter. This guide explores 30 essential trading strategies, providing detailed setups, entry and exit rules to transform your trading approach from chance to a calculated business.
30 Full Trading Strategies: Complete Setup, Entry, and Exit Guide
85% of day traders lose money in their first year according to FINRA data. It's not a scare tactic—it's market reality.
The difference between those who succeed? They treat trading as a business, not gambling.
In trading, a strategy acts as your business plan, guiding decisions and separating you from gamblers. Here’s a comprehensive collection of 30 essential trading strategies with detailed setups, stop loss rules, and take profit targets for traders at all levels.
How Do You Trade Price Action Patterns at Support and Resistance?
Setup: Focus on key candlestick patterns at significant levels:
- Pin bars (long wicks) at support/resistance.
- Engulfing patterns at swing points.
- Inside bars for continuation setups.
- Entry:
- Long: Bullish pin bar or engulfing at support — enter on next candle.
- Short: Bearish pin bar or engulfing at resistance.
- Inside bar: Enter on break of mother candle high/low.
- Stop Loss: Pin bar: Stop beyond the wick. Engulfing: Stop below/above the pattern. Inside bar: Stop at opposite side of mother candle.
- Take Profit:
- First target: 2R or next structure level.
- Second target: 3R or measured move based on pattern size.
- Trail stop behind new swing points as price moves.
📈 Strategy Tip: Cesar Alvarez (2019) analyzed 15 years of S&P 500 data and found basic engulfing patterns were random alone but, when combined with trend + volatility filters, achieved average expectancy of +0.21 R per trade.
How Do You Trade Trendline Bounces and Break-and-Retests?
Setup: Connect at least three swing points to form a valid trendline. Trade bounces off the trendline in trend direction or break-and-retest setups for reversals.
- Entry:
- Bounce Long: Price touches ascending trendline, forms bullish rejection candle.
- Bounce Short: Price touches descending trendline, forms bearish rejection.
- Breakout: Wait for candle close beyond trendline, then retest from opposite side for confirmation.
- Stop Loss:
- For bounces: Stop below/above the trendline wick.
- For breakouts: Stop inside prior trendline zone (near retest).
- Take Profit:
- First target: 2R or next structure level.
- Second target: Opposite trendline or key Fibonacci extension.
- Trail stop under/over minor swings as price trends.
📌 Key Insight: A decade-long analysis by Cesar Alvarez (2021) found third-touch trendline bounces on daily S&P 500 data yielded a 62% win rate with 1.6 R/R, while first or second touches were statistically random.
How Do You Trade Moving Average Pullbacks in a Trend?
Setup: Use two moving averages to define trend and entries:
- Fast MA: 20 or 50 period.
- Slow MA: 100 or 200 period.
Best for trending markets — avoid during choppy/ranging conditions.
- Entry:
- Long: Price closes above both MAs + fast MA above slow MA + pullback to fast MA as support.
- Short: Price closes below both MAs + fast MA below slow MA + pullback to fast MA as resistance.
- Stop Loss: Below the slow MA (for longs) or above the slow MA (for shorts).
- Take Profit:
- First target: 2R or next resistance/support.
- Second target: Trail stop using the fast MA as dynamic support/resistance.
- Exit if price closes opposite side of slow MA.
📌 Key Insight: Meb Faber (2006–2013) demonstrated that 10-month SMA timing on U.S. equities cut drawdowns ≈65% while maintaining most total returns, validating MA crossovers as a robust risk-control method.
How Do You Trade EMA Crossovers for Trend Entries?
Setup: Apply two EMAs (e.g., 8 & 20 for intraday, 50 & 200 for swing). Watch for crossovers and trend alignment.
- Entry:
- Long (Golden Cross): 8 EMA crosses above 20 EMA; price closes above both with strong candle.
- Short (Death Cross): 8 EMA crosses below 20 EMA; price closes below both.
- Stop Loss: Below the most recent swing low (for longs) or above the most recent swing high (for shorts) — around 1× ATR.
- Take Profit:
- First target: 2R or next resistance/support.
- Trail using the shorter EMA (e.g., 8 EMA) as a dynamic stop.
📌 Key Insight: A century-long U.S.-equity test by Meb Faber (2013) found that a 50/200-day EMA crossover reduced maximum drawdowns by over 70% while retaining 90% of total buy-and-hold returns.
How Do You Trade VWAP Breakouts and Retests?
Setup: Watch for the price to break above (for longs) or below (for shorts) the VWAP, confirmed by strong volume. The breakout candle should close fully beyond VWAP with increasing volume.
- Entry:
- Long: Enter when price closes above VWAP and retests it as support.
- Short: Enter when price closes below VWAP and retests it as resistance.
- Stop Loss: Slightly below the VWAP (for longs) or above it (for shorts), around 0.25–0.5 ATR buffer to avoid noise.
- Take Profit:
- Target 2R (twice your risk) as the first profit zone.
- Trail stops using a 9 EMA or previous swing low/high once in profit.
- Optional extended target at daily high/low or 1.5x ATR from entry.
📈 Strategy Tip: A five-year intraday backtest on SPY by Lars Kestner (Quantified Strategies, 2023) showed that adding a 9-EMA confirmation filter to VWAP breakouts increased the win rate from 51% to 61% and reduced drawdowns by 12%.
How Do You Scalp Using VWAP and the 9 EMA?
Setup: Focus on liquid instruments with tight spreads and high volume (e.g., EUR/USD, SPY). Best times: first 2 hours after major market opens.
Use 1-min or 5-min charts with EMA + VWAP combo for direction.
- Entry:
- Long: Price above VWAP + bullish candle closing above 9 EMA.
- Short: Price below VWAP + bearish candle closing below 9 EMA.
- Confirm with tape reading or volume surge.
- Stop Loss: Small — typically 0.5× ATR or just beyond recent micro-swing.
- Take Profit:
- Target: 1R–1.5R per trade (scalpers focus on high frequency, low R:R).
- Exit quickly if price stalls or reverses.
- Optional trailing exit via 9 EMA crossover.
⚠️ Warning: Performance analytics from Tickmill Institutional (2022) reported professional EUR/USD scalpers averaged 0.7 pip edge per trade during London-New York overlap with sub-1 pip spreads, confirming microstructure efficiency limits.
How Do You Trade the Opening Range Breakout (ORB)?
Setup: Define the opening range as the first 5, 15, or 30 minutes of market open (most use 15 min). Mark the high and low of this range — these are your breakout levels.
- Entry:
- Long: Price breaks above ORB high with volume.
- Short: Price breaks below ORB low with volume.
- Confirm with a candle close beyond the range.
- Stop Loss: At the midpoint of the opening range or opposite side of the range (more conservative).
- Take Profit:
- First target: 1× the opening range size (measured move).
- Second target: 2× the opening range or daily pivot levels.
- Trail stop using 9 EMA on 5-min chart once in profit.
⚠️ Warning: Testing by Quantified Strategies (2021) found ORB setups worked best when opening range width was 0.5–1.5% of ADR, yielding a 68% win rate—ranges outside that window sharply reduced performance.
How Do You Trade Gap and Go Setups at the Open?
Setup: Trade stocks gapping 4%+ at the open with a strong news catalyst (earnings, FDA approval, contract wins). Focus on low-float stocks (<50M shares) with high premarket volume (1M+ shares).
- Entry:
- Setup 1: Breakout above pre-market high with strong opening volume.
- Setup 2: Opening range breakout (ORB) after the first 5-minute candle.
- Setup 3: Red-to-Green move – price moves above yesterday's close after opening red.
- Stop Loss: Below VWAP or the opening range low (whichever is closer).
- Take Profit:
- First target: 2R (twice your risk).
- Second target: 3R or psychological levels ($10, $20, etc.).
- Trail stop using the 5-min 9 EMA or a VWAP hold — exit if price loses VWAP with volume.
📈 Strategy Tip: A review of 1,000 SPY gap days by Cory Mitchell (2023) showed small gaps (<0.3%) filled intraday 92% of the time, while large catalyst-driven gaps continued 68% of the time—quantifying the "Gap and Go" bias.
How Do You Trade Overnight Gaps: Fill vs Continuation?
Setup: Focus on stocks that gap 2%+ from previous close with catalyst. Best during first hour of trading — momentum fades after.
- Entry:
- Gap Fill: Short gaps up or long gaps down, expecting price to fill the gap.
- Gap Continuation: Long gaps up or short gaps down after first pullback/consolidation.
- Stop Loss: For gap fills: Stop beyond the gap extreme (high for shorts, low for longs). For continuation: Stop at gap midpoint.
- Take Profit:
- Gap fills: Target the previous day's close (complete fill).
- Continuation: Target 1.5–2× the gap size as measured extension.
- Trail using VWAP or 9 EMA for momentum trades.
📊 Data Point: A 15-year SPY/ES study by Cory Mitchell (2023) showed Monday gap-ups filled intraday 61% of the time, versus ≈47% mid-week; catalyst gaps were twice as likely to extend, supporting differentiated treatment.
How Do You Turn These Strategy Rules Into Consistent Improvement Over Time?
Each setup above defines what to look for (conditions), what to do (entry), and how to manage risk and exits (stop loss and take profit). The missing step for most traders is verifying whether they actually followed those rules and whether the outcomes match the expectancy implied by the research and data points cited. A trading journal helps you review trades with context—market regime, time of day, volatility, and execution quality—so you can separate strategy edge from avoidable mistakes like late entries, oversized risk, or moving stops. Over time, logging screenshots, notes, and PnL metrics makes it easier to spot which patterns work best for you and which filters improve results. Using a dedicated tracker such as Rizetrade trading journal analytics dashboard for trade tracking and performance statistics can also standardize how you measure R-multiples, win rate, drawdowns, and rule adherence across different strategies.