Guide to Day Trading Strategies

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away from its equilibrium point. For trend based trading, I generally look to 
À
nd entries close 
to the VWAP. This is not always possible if a stock has made a really strong intraday move. In 
cases where the price is extended from the VWAP, but I still want to take a trend based trade, I 
will refer back to the price relative to the 9 EMA.
Chart with Candle outside Bollinger Bands.

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Image of standard Bollinger Bands settings.
Bollinger Bands
I use Bollinger Bands exclusively for timing reversal trades. I use a standard 20 period moving 
average with a 2.0 standard deviation for my Bollinger Bands. This is the default setting for the 
indicator. As a counter trend trader, we have to be very careful not to enter a reversal trade 
too soon. We want to enter stocks as close to the maximum extension point, and then ride the 
momentum when the trend reverses. In order to get good entries, I wait for candles to trade 
outside the Bollinger Bands. You will notice that almost all of the price action on any given day 

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will take place inside the Bollinger Bands. Therefore, anytime the price is outside the Bollinger 
Bands, it’s an extreme situation. It is important to remember that prices can stay outside the 
Bollinger Bands during a parabolic move, so we still have to be cautious about entering too 
soon. The reason we trade intraday extremes, like candles outside Bollinger Bands, is because 
we know this is where we will 
À
nd above average volume. In order to make sure any reversal 
is trading at extremes, I keep the Bollinger Bands on my 5min charts. I do not use them on the 
daily charts or the 1min charts.