Day Trading Strategy : Dual Candle Breakout to Make Money

Day Trading Startegies

There are innumerous day trading strategies which have a focus on the breakout which works on the premise that when the price clears a specified level on your chart, with increased volume will give you good dividends. A few other trading strategies include Scalping or Momentum or Reversal or using the Pivot Points. However, we are providing you a sure shot trading strategy which yields high accuracy and can be effectively used for the day trading.

When it comes to correctly entering an uptrending charts, your goal should always be to find the strongest price action breakouts.

One of the easiest patterns to look for is one in which uptrending candles are getting taller in size, indicating increasing buying strength. When daily trading ranges expand during an uptrend it indicates a technical breakout that you can capitalize on. T

Simply buying into an uptrend in isolation often leads to false breakouts, much to every trader’s frustration. Instead, you may find more success by looking for dual-candle breakout patterns, in which the height of the second of two candles is taller than the first candle in an uptrend

Note that this pattern needs to occur at a new one-month high to be valid; you do not use this for entries when the candle pattern is observed inside the previous trading ranges or near lows.

Also, the volume of the second candle needs to be higher than the volume of the first candle

You enter on the day following this dual-candle breakout pattern.

Step-by-step action plan and Here’s how you can start using this strategy:

Step 1: Visually scan for charts in which a sequence of two candles in an uptrend is seen, in which the second the candle has a height of at least twice the previous candle height.

Step 2: Enter your position on the day following this dual-candle breakout the pattern once the price is above the high of the second candle.

Step 3: Use an initial stop-loss at the low of the candle pattern.

Why this technique works? 

Think of price action breakouts like driving onto a freeway—you want to accelerate your speed when driving; in trading, you want to enter your trades as price is going higher relatively quickly. This momentum-based trading approach is designed to help us enter our positions during strong price action, relatively early in the breakout move.

This is similar to using technical indicators such as the average true range (ATR) as it increases in value, revealing an acceleration to the upside in price action.

Trade management tips

You can use this trading strategy to make good money by using another trading setup or pattern with it to confirm the breakout

When entering your first breakout in a sequence, it is usually a good idea to use a very small share size. When setting your stop-loss, the price that proves this pattern wrong would be an obvious loss of support under both candles. In addition to identifying your first entry, you can also, use this dual candle pattern later in the lifecycle of your swing trades to scale in and buy more shares.

This pattern is relatively easy to spot visually and is a core pattern.

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