Thread by @Team2Trading

My strategy for day trading $SPY 🧵

Learn to identify & execute your own high quality trades.

Let's begin👇

My goal : Identify the trend & capture a piece of it.

To accomplish this I use areas of support & resistance combined with EMA trends & basic chart patterns.

*I have found this approach gives me all the info I need to find & alert high quality trades in real time, without clouding my judgement or over complicating it 👇

Support & Resistance :

Start by charting out these 4 levels everyday before the market opens ✍️

Previous Day High✅
Previous Day Low✅
Pre Market High✅
Pre Market Low✅

Previous Day High / Low = The highest & lowest price of the previous trading session (RTH)

Pre Market High / Low = The highest & lowest price from 4am to 9:30am EST.

Visual example of where to find those levels 👇

I create a small zone using those Previous Day High & Low levels. This gives me my area of support / resistance to watch.

I do this on the 15 minute chart.

The Pre Market High & Low levels are my secondary range to watch.

I leave these marked as dotted lines on my chart.

Now... One of the best ways to form your daily bias is by watching the reaction to those Previous Day High & Low zones👀

These are the 4 main scenarios I'm watching :

Break PDH = Bullish Bias 📈
Reject PDH = Bearish Bias 📉
Hold PDL = Bullish Bias 📈
Break PDL = Bearish Bias 📉

Here's a visual example of what I'm looking for 👇

Typically we see more one sided momentum when price breaks outside of that Previous Days Range.

Keep that in mind, balanced days between the PDH & PDL can be a bit more choppy 👇

I like to use that info and be a little more cautious on range days. I typically size my positions something like this...

If price is inside both the Previous Day High & Low + Pre Market High & Low I'm being very cautious (RISK OFF)

If price is outside of both of those ranges I take a more RISK ON approach.

It's a simple range vs trend outlook.

Not a hard rule for me but its something to keep in mind, especially for newer traders who get caught up in choppy conditions often 👇

Okay so the levels & zones are marked and ready to go! Very simple right?

Now I turn on the EMA's...

I use the 13 , 48 , 200 EMA's. They work great on most timeframes but I'm typically using them on the 2 minute chart.

These help with everything from identifying trends, avoiding chop, entries, exits etc...

Bullish vs Bearish EMA trends 📈📉

Study these cheat sheets! They will be a game changer for you👇

Bull / Bear Flags ✍️

There are tons of chart patterns out there to master.

None are as simple & effective as flags.

Learn to identify Bull & Bear flags for momentum and added confirmation. You will be very glad you did 👇

Now lets get caught up on what we are working with here to find some A+ trades...

Support & Resistance ✅
EMA trends ✅
Flags ✅

This gives me multiple confirmations to help me trade trends like this with confidence 👇

A+ trade on calls 📝

Breaks PDH resistance ✅
Bullish EMA trend ✅
Bull Flagging ✅

Multiple confirmations for upside.
0 confirmations for downside.

A+ trade on puts 📝

Breaks PDL support ✅
Bearish EMA trend ✅
Bear Flagging ✅

Multiple confirmations for downside.
0 confirmations for upside.

A+ range trade on puts 📝

Rejects PDH resistance ✅
EMA trend flips Bearish ✅
Bear Flagging ✅

A+ range trade on calls 📝

Bounces at PDL support ✅
Bullish EMA trend ✅
Bull Flagging ✅

Support & Resistance combined with EMA trends!

Simple... Effective... Game changing 👇

There's only so much I can cover in a single thread!

Make sure to follow along for daily tips, trade recaps , breakdowns, threads, etc...

And don't worry, I only post charts and trades that I personally took & alerted in real time. No hindsight nonsense over here 🤙

Have a great weekend everyone!

And remember, have fun and enjoy the process.

Trading is a privilege that we are very lucky to have 💚