60 Minute Charts Day Trading Strategy | Trading Plan Video

If you are finding the current long-term tape is driving you crazy, here is a simple solution that works like a charm for day trading.

This is not a full trading plan but it come close. We are using the SPY ETF as an example but you can apply the trading strategy to any stock.

The concept is to use the 60 minute charts for your day trading trend and the open price indicator as your filter.

60 Minute Charts and Open Price Indicator

sixty minute charts

 

60 Minute Charts: How to Apply the Day Trading Strategy

The Open Price Indicator

Most traders will identify a stock’s strength, by net change, or change form the previous close.

This is fine if you are swing trading, but today, we are purely using the 60 minute charts as the main trend indicator.

Once we have identified a trend (The current hour is a green or red candlestick) we then look for confirmation from the last price from the open price.

If we get agreement, we then drop down to a shorter time frame, usually the five or fifteen minute charts, to identify an entry/

Since we are trading by the hour, flag patterns can take too long to develop.

This means looking for:

  • An inside candlestick breakout.
  • In the direction of the indicators just described.

This the best bet to find a clean entry signal.

This strategy calls for you to “reset” your trend every hour and reevaluate if it is still in sync with the change from the open.

When they diverge, you simply let the entry signals go, and wait for confirmation.

How to Apply the Strategy to Swing Trading

Swing traders can use the same filters, but need to change the time frames to monthly candlesticks (for change from the open) and weekly candlesticks to reset in place of the current 60 minute charts.

If you want, you could also create a trading game plan using a simple moving average to get additional confirmation.

About the Author

Pete is a full-time trader and mentor since 2000. Author of Equity Trader 101 and the Order Flow Method. He is dedicated to help self-directed traders to bust through the six-figure level.

Leave a Reply 5 comments

Aykut Reply

Thank you for the idea Pete…

mike_tee_vee Reply

Pete, is the time that has elapsed on the current 60 minute bar relevant to the trend and entry? For example, if the time is 10:03am and:

– the change from the open is positive
– the current 60 min bar is green, and
– there is an entry signal on the 5 minute chart

is the 3 minutes that has elapsed on the current 60 min bar enough confirmation for a continuation of trend?

    Info Reply

    Hey Mike
    Actually it is.
    I wouldn’t necessarily use the first 3 minutes of the day, but yes.
    You need a definitive structure for price action to produce consistent P&L.
    That means you choose your reference points and trade them with confidence.

    I understand the context of your question, and the answer is yes.
    Pete

William Band Reply

I use the 60 min bar after 10 AM..gap plays before..I was using the 60 min above and below the 20 mavg…but i really like your idea of using the open…

You say/reference monthly charts for swing trades…why not just use weekly and daily charts…weekly subs for 60 min and daily is the 5 min

Leave a Reply: