A "Foolproof" Guide to Intraday Trading:

A "Foolproof" Guide to Intraday Trading: Practical Checklists for Scalping & Moving Average Crossover Strategies

 

For traders new to intraday trading or those seeking efficient execution, a standardized, "ready-to-use" operating process is far more valuable than complex theories. This article breaks down two core intraday strategies—the 5-minute chart Scalping Strategy and the Dual-Moving Average Crossover Strategy—into step-by-step practical checklists. From asset selection to performance tracking, every step comes with clear, specific requirements; you only need to follow them to quickly implement your trades.

 

Let's start with the Scalping Strategy, which focuses on capturing tiny price fluctuations and accumulating profits through high-frequency trades. The 5-minute chart version balances flexibility and stability, with operations centered around ten key steps. For asset selection, you must target high-liquidity, low-spread instruments—such as BTC/USDT and ETH/USDT in the cryptocurrency market, or EUR/USD in the forex market. These assets minimize the erosion of short-term profits caused by slippage. The time frame adopts a "primary-secondary combination" model: the 5-minute chart (primary) is used to monitor real-time fluctuations, while the 15-minute chart (secondary) helps judge the short-term trend direction. Common trading platforms like MT4/5 or exchange web interfaces can meet these viewing needs. The indicator combination is fixed as EMA(9), EMA(21), and RSI(14). Golden crosses and death crosses of the moving averages, paired with the RSI's overbought (above 70) and oversold (below 30) zones, create confirmation signals. To enter a trade, three conditions must be met simultaneously: for a long position, EMA9 must cross above EMA21, RSI must be <30, and the price must retest the moving average; for a short position, EMA9 must cross below EMA21, RSI must be >70, and the price must rebound to the moving average. Synchronized signals reduce the risk of false breakouts.

 

Position sizing is your risk safety line—risk per trade must be ≤1% of your account capital. Whether calculated manually or via a trading script, this rule must be strictly followed. Stop-loss is set to a fixed 10–15 pips, or 2 pips outside recent highs/lows. A combination of hard stop-loss and trailing stop-loss is recommended: this guards against sudden volatility while locking in partial profits when the trade moves in your favor. Take-profit follows a 1:1.5 or 1:2 risk-reward ratio; for example, a 10-pip stop-loss corresponds to a 15–20 pip take-profit, and you must close the position immediately once the target is hit. Exit timing also includes scenarios beyond stop-loss/take-profit triggers—if a reverse signal appears (e.g., a death cross after opening a long position), you need to exit early. Trading sessions should prioritize high-volatility windows, such as the London-New York overlap in forex, or periods around key economic data releases (e.g., U.S. Nonfarm Payrolls, CPI). However, avoid the 30 seconds before and after major news announcements, as market liquidity changes drastically then, leading to high slippage risks. Finally, daily review is essential: use Excel or a professional Trading Journal to record each trade's profit/loss, overall win rate, and maximum drawdown. Data-driven reviews help optimize operational details. Additionally, high-frequency scalping requires a stable trading environment—using a VPS (Virtual Private Server) ensures network stability, and choosing an STP/ECN (Straight Through Processing/Electronic Communication Network) account further reduces trading costs and slippage.

 

Next is the Dual-Moving Average Crossover Strategy, better suited for trend-following traders. This strategy focuses on riding trends, with a longer holding period that can even extend to swing trading, and it also has a clear operational framework. Asset selection prioritizes instruments with strong trend continuity and high trading volume—such as the S&P 500, NASDAQ 100 indices in the U.S. market, or large-cap stocks like Apple (AAPL) and Microsoft (MSFT). Sufficient volume ensures trend sustainability and reduces interference from range-bound markets. The time frame is flexible based on your trading cycle: use the daily chart for long-term trends, or the 60-minute chart for swing trades. The strategy logic remains consistent across time frames—only the holding duration needs adjustment. The indicator setup is fixed as the short-term EMA(12) and long-term EMA(26); for long-term investing, you can also replace them with the 50-week and 200-week moving averages. The core lies in generating buy/sell signals through crossovers of the two moving averages: a buy signal (Golden Cross) occurs when the short-term moving average crosses above the long-term one, with higher reliability if the MACD histogram turns red simultaneously; a sell signal (Death Cross) occurs when the short-term moving average crosses below the long-term one, and it works better with a green MACD histogram.

 

Position management adopts an "extreme" approach: go fully long when a Golden Cross appears, and fully short when a Death Cross appears. If you do not engage in short-selling, simply exit the market upon a Death Cross. Stop-loss can be set in two ways: either below the low point before the Golden Cross (once the closing price breaks this level after a Death Cross), or calculated using 2x ATR (Average True Range). Both methods effectively avoid large losses from trend reversals. Take-profit does not require a preset fixed level—exit entirely when a Death Cross appears. For more conservative returns, you can also use partial take-profit (e.g., closing 50% of the position mid-trend to lock in profits). Trading costs require close attention: assuming a 0.1% round-trip commission, minimize turnover in practice to prevent fees from eroding returns. Performance tracking involves calculating annualized returns, maximum drawdown, and Sharpe ratio, then comparing them to benchmark indices (e.g., the S&P 500 Strategy vs. the S&P 500 Index). Historical backtesting data from July 2010 to 2023 shows that the S&P 500 Dual-Moving Average Strategy achieved an 8.7% annualized return, while the NASDAQ 100 version reached 10.9%—both significantly outperforming their respective benchmarks with lower maximum drawdowns, verifying the strategy's effectiveness.

 

Finally, three key tips for implementing these strategies: first, run through the entire process on a demo account to ensure every step—from indicator setup to position closing—can be automated or semi-automated. This avoids missing signals due to inexperience in live trading. Second, when transitioning to live trading, test with a small portion of your capital (e.g., 10% of your account) for 1–2 weeks. Only after confirming the strategy matches your trading style and delivers stable profits should you gradually increase your capital allocation. Third, conduct a weekly review to check for "signal drift" (e.g., previously reliable Golden Cross signals suddenly becoming ineffective). If anomalies occur, re-optimize parameters to ensure the strategy remains adapted to current market conditions.

 

Whether you choose the high-frequency, profit-accumulating Scalping Strategy or the trend-focused Moving Average Crossover Strategy, the core lies in "strict execution." Following this practical checklist helps you avoid common mistakes new traders make—such as impulsive decisions or inconsistent parameter use.