Chapter 8- Day Trading Strategies| 5 Min And 15 Min Day Trade Setup

In this chapter, you will be learning 2 core strategies I use in my day trading. One is a 15 min trading strategy for conservative traders and another one is a 5 min day trading setup for aggressive traders. Smaller time frame strategies should be used with proper risk management rules as they have a higher chance of getting stopped out. So let’s start with 5 min trading strategy.

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5 min day trading strategy

In our 5 min day trading setup, we look for clear bullish or bearish hammer candle at lows or highs. It’s a reversal strategy and works well if combined with support and resistance levels. In the below-shown image example, you can see how a reversal happened after prices touched the support 1 level and a bullish hammer candlestick pattern is formed.

5 min buying strategy- bullish hammer candle pattern

Buying setup

Whenever financial security like stocks makes day low and forms a bullish hammer candle near support levels, its a buying entry. Remember the color doesn’t matter. It can be green or red color but the candle formed should be a bullish hammer candle. In the above-shown image example, the color of the bullish hammer candle was red but it was a reversal candle. The time frame to use for this 5 min buying strategy is 5 min.

Conditions for 5 min trading strategy buying setup

  1. Bullish hammer candle should form after touching the support levels at least once. 
  2. Overall percentage change of financial security should not be minus 2 % or below minus 2%

For reference- Avoid these types of entries

  1. Bullish hammer forming without touching the support level
  2. Bullish hammer forming near resistance
  3. Bullish hammer forming after financial security has crossed minus 2 % change.

Selling setup

When financial security like stocks makes higher highs(the day high) and forms a bearish hammer candle also known as hanging man in technical analysis, its a sell entry. Again the color of bearish hammer candle doesn’t matter. The formation of the candle should represent a bearish hammer candle. The below image shows a reversal trade setup after the formation of bearish hammer candlestick.

5 min selling strategy- bearish hammer candle pattern

Conditions for 5 min trading strategy sell trade setup

  1. Bearish hammer candle should form after touching the resistance levels at least once. 
  2. Overall percentage change of financial security should not be plus 2 % or above 2%.

For reference- Avoid these types of entries

  1. Bearish hammer forming without touching the resistance levels
  2. Bearish hammer forming near support
  3. Bearish hammer forming after financial security has crossed 2 % or above change from the previous day close.

15 min day trading strategy

In this strategy, we will be looking for candle closing above the previous candle high or low for entries. 

Buying setup

If a candle closes above the previous candle high, you have a buying entry. Your stop loss will be the previous candle low and quantity must be taken as per our risk management chapter.

Conditions for 15 min trading strategy buying setup

  1. Candle closing buying entry should be taken only after the prices touch the support levels at least once. 
  2. Overall percentage change of financial security should not be minus 2 % or below minus 2%.
  3. This buying entry should only be considered if there are three consecutive red candles when prices make a new day low. The below-shown image example shows a perfect 15 min candle closing buying entry.
15 min buying strategy for day trading

Selling setup

If a candle closes below the previous candle low, you can enter sell and keep previous candle high as your stop loss. Again position sizing should be done as discussed in risk management chapter.

Conditions for 15 min trading strategy sell trade setup

  1. Candle closing selling entry should be taken only after the prices touch the resistance levels at least once. 
  2. Overall percentage change of financial security should not be plus 2 % or above plus 2%.
  3. This selling entry should only be considered if there are three consecutive green candles when prices make a new high of the day.

Conclusion

You have learned 2 core day trading strategies in this chapter. So use these strategies with very low capital and test them. You don’t have to scan stocks individually which is very time consuming for this pattern. Simply used advanced day trading scanners as we use. Our next chapter teaches you how to quickly scan such stocks for day trading. Now its time to read our Chapter 9: Advanced Filters And Scanners

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