Mean reversion day trading inherently has lower profit margins with . The reason behind this is very simple due to the proximity of the points with the price action you’re left with lower profit margins.
So, from the start, you have a handicap that as a trade you need to overcome.
Trading is all about finding those situations where we maximize our profits and minimize the risk.
That’s the reason why we prefer trading breakouts of the . The profit potential is far greater. However, in order to confirm our breakout trade, we’re going to throw in another indicator.
So, what’s the best combination with the points?
The or can be used in combination with points to confirm breakouts.
Learn more about how the pro’s trade using the trading system HERE.
So, what are the rules to confirm the breakouts?
There are two rules:
For breakout trades above the resistance R4, we need to see a reading of +100 at the moment the breakout happens.
For breakout trades below the support S3, we need to see a reading of -100 to confirm the breakout.
Note* an effective way to hide your protective stop loss would be below (above) the resistance R3 (support S3).
You determine your own TP.