What is the best day trading strategy and why?

Let me share with you all a simple Intraday setup

This is a short setup. You will sell first and then buy later to square off your position.

Chart type : Candlestick chart

Timeframe : 15 minutes chart

All you got to do now is look for open gaps.

What is an open gap? As the name suggests, there should be a gap between two candles.

Let us look at the rules now :

Step 1 : Find an open gap in the first candle( 15 minutes candle)

Step 2 : This first candle should give a bearish close ( a red candle)

Only after step 1 and step 2 criteria is fulfilled, you will proceed to take entry in step 3.

Let me explain with a help of a chart

( Image souce : NetDania App)

Here the scrip name is Apollo Hospitals.

Can you see an open gap in the first candle of the day and a bearish close ( a red candle)?

Yes, we are going to trade this setup!

Coming to your entry, exit and stop loss, entry is when the next candle breaches the first candle's low ( The moment it breaches the green line is where you will enter a position)

The entry should be between 9.30 am and 9.45 am.

In our example, the entry is at 1216.

Stop loss is the high of the first candle which is indicated by red dotted line in the image.

Stop loss in our example is 1244.

Now take the difference between your entry point and your stop loss point i.e ( 1244 - 1216 = 28 points)

The exit would be 28 points below your entry point.

In our example the exit would be at 1188 i.e ( 1216 - 28 = 1188)

I hope the setup is easy to understand and implement :)