MOVING TARGET DAY TRADING EXIT STRATEGYOur moving target exit strategy is designed to capitalize on strong market trends that have continued momentum.
A strong trading market doesn’t produce significant retracements, and the target trading strategy can help you ride those trends so you can achieve your profits targets as well.
Warning our target trading strategy doesn’t require using any type of technical indicator. Everything you need to trade with the moving target strategy successfully is the price chart.
This powerful day trading target strategy will help you manage your winning positions in a way that will allow you to maximize your profits. And you maximize your trading profits by riding the trend all the way until it starts fading away.
The moving target strategy can be used on any market and any time frame, you can adjust it even for short-term trades.
Step #1: Use your preferred trade entry strategy. A breakout strategy works better with our moving target exit trading strategy
The first step is to enter the market.
Since our powerful day trading target strategy is an exit strategy, you can employ your preferred trade entry strategy. Our team at TGS has thoroughly backtested this exit strategy and found out that by using a breakout trading strategy, the accuracy of this method increases considerably.
The rectangle chart pattern is one of the most effective price patterns for trading breakouts.
The rectangle pattern highlights the battle between the bulls and the bears very well. Inside the rectangle trading pattern, there is a consolidation that shows that no one is really in control of this market, nor the bulls or the bears.
As more stops build up above/below the rectangle pattern the more critical these levels become for the institutional traders who need the liquidity provided by these orders to execute their big trades.
When the breakout happens, the momentum will precede price, and if real buying power is behind the breakout, the trend will resume.
How to draw the rectangle pattern?
Two requirements need to be satisfied to be able to draw the rectangle formation:
First, we need an established trend because the big money is made when it’s used as a continuation pattern.
Secondly, we need to have at least two equal (or near the same) lows and highs to draw two horizontal lines at should contain the price action.
The first step is to enter the market when the breakout happens. We wait for the candle close to confirm the validity of the breakout. The entry and exit strategies for day trading are quite simple.
After our order got triggered, we have to let the market do its job and do nothing.
Step #2: Leave the market work for five consecutive trading candles
It’s somewhat unusual for traders to give the market the necessary time to develop a trend, but it’s the right thing to do because that’s how hedge fund managers approach the markets.
At this stage, you’ll have to rely on your initial stop loss to manage the risk.
Note* We recommend to avoid the natural impulse to do anything during the first five trading candles.
Step #3: Place protective Stop Loss 10 pips below the breakout candle
Place your protective stop loss 10 pips below the breakout candle. We’ve added a buffer of 10 pips to protect ourselves in case of any false breakouts.
This is a very reliable strategy to manage your risk because the moment the breakout candle high is penetrated we know with certainty that we’re on the wrong side of the market. In this case, you want to liquidate your position.
Step #4: The Moving Target Strategy Takes Profit when the market makes a 10 candle low
After we’re in a trade and we have past five trading candles, we start counting 10 candles back each trading candle. When the market makes a new 10 candle low, we close our trade in profit.
This is an excellent trading method to ride the trend and maximize your day trading daily profit.
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