3 Day Trading Strategies to Use in the Current Market Environment

day trading strategies

This market environment is like no other. We are seeing some of the worst economic conditions of all time. Record high unemployment numbers. Hundreds of thousands of businesses shut down.

But yet the stock market doesn’t care. The market has been on a non-stop, grinding uptrend for the past 2 months. It doesn’t make sense. But it doesn’t have to. The stock market is not always an accurate reflection of the current economic conditions. As momentum traders, all we care about is following the trend, and capitalizing on the momentum.

One of the most important lessons from this rally: Price action will always matter more than fundamentals. Supply and demand is the only thing you need to pay attention to as a trader. Be aware of fundamentals, but don’t let them make you get stubborn over a bias. Here are 3 day trading strategies that have been working well in the current market environment:

The Quick Pull Back Buy

A great set-up to use right near the market open. Many beaten-down stocks from March are seeing strong rallies. Many of them see strong upward momentum at the open.

The market open, the time of the trading day from 9:30AM-11 AM, is a period where stocks go on the strongest and cleanest trends. This setup is one of the best day trading strategies to capitalize on volatility at the open.

Learn how to use the Quick Pullback Buy in this video lesson:

The Rubberband Short Setup

This is one of the best setups to do in strong, uptrending markets. Many stocks get very overbought in these conditions, and become prime candidates for a short play, meaning you bet on the stock to go down.

This setup needs to be timed well. You are going countertrend, and it is always possible the stock can continue going up. Watch this video lesson to learn how to time the trade so you can catch the turn:

Day Trading the News

Understand this: The best traders don’t put on new trades as soon the news comes out. They wait for several minutes to let the trend settle and materialize. And then the find a low-risk entry to join it. Trading the news is not buying or shorting a peak volatility, guessing the stock’s reaction to the news. This video lesson will show you how to do it correctly with a recent trade I had on NCLH:

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