3 Simple Strategies Prop Traders Use Every Day

14.08.2025

Education

There are an infinite number of trading strategies in the world of trading. In the end, everyone invents something of their own. But for a beginner trader, searching for unique patterns from scratch can take too much time. In the beginning, it is better to focus on known ideas.

There are also many of them. Perhaps even too many. Therefore, it is useful to have an overview of the main "formulas". They will give a general vision of the mechanism of strategies. And will help to choose a close option for a specific task. Scalping, day trading, swing trading.

This approach may seem too long. It is better to immediately take one known strategy and try to customize it for yourself. Most often, this is what is done. Some are lucky. And some are not. Then the trader tries to hammer a small nail for the frame with a "sledgehammer". He uses a strategy from swing trading in scalping.

More often than not, this ends with a "hole in the wall". The beginner projects his unsuccessful experience onto all trading. Although you just needed to spend time reading the instructions. Understand the basic ideas of the strategies. And make a better choice.

Scalping

A popular idea in scalping is "false breakout". It is based on three observations:

- the market moves in waves,
- stop losses are hidden behind previous extremes,
- stop losses are knocked out all the time.

It turns out to be an interesting scheme. In most cases, prices slightly update the previous maximum or minimum, and then go back. Everyone sees this situation. They are looking for the best ratios of stop loss and take profit. Although it is worth trying to change your perception.

Instead of buying on updating the maximum or selling on updating the minimum, you can trade in the opposite direction. Sell slightly above the previous maximum. And buy slightly below the previous minimum.

The main thing is not to forget that scalping is minimal targets. With a five-digit quote in the EURUSD pair, take profit should not exceed 100-150 points. Stop loss will be the same. "False breakout", often used by prop companies. You just need to adjust it to the trading instrument.

Day trading

In day trading, there are more goals. But as in scalping, positions are closed during the day. This leaves its mark. Each day is considered separately. You need to predict how it will go.

Usually, it all comes down to two options. Breakout of an important price level or rebound. The importance of support and resistance is determined in different ways. Someone uses the "classics". Builds a trend channel. Looks at the price behavior near its boundaries. Based on them, they make decisions.

And someone takes more objective levels. For example, from the Chicago Mercantile Exchange (CME) website. Daily reports are published here. In them, you can see where the interests of large trading participants are. Traders trade rebounds from strong levels. And near weak ones, they look for breakout transactions.

Take profits in day trading correspond to the size of the average impulse. For major currency pairs, this is about 500 points at a five-digit quote. CME reports can be found at the link - https://www.cmegroup.com/market-data/daily-bulletin.html.

Swing trading

There are no time limits in swing trading. Targets from 500 points at a five-digit quote. Therefore, you can focus on less accurate strategies. They are mainly based on average price values. Moving averages (MA), oscillators such as MACD or RSI.

You need to find extreme overbought and oversold zones. For example, using RSI or divergences / convergences in MACD. Using an exponential moving average, determine the average price value for the period. The most popular of them are: 50, 100, 150 and 200. And then trade for a return to average levels.

Counter-trend trading attracts beginners. The idea is simple at first glance. But such strategies are suitable only for experienced traders. They require strict adherence to the rules of the trading system. Transactions here can last several days or a week. This creates a high psychological load. Therefore, swing trading is less often used in prop trading.

Creating a trading strategy based on data from scratch

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