Maurice Kenny Trading Strategy | Overview

Day trading can be a hard approach for most aspiring traders, even more so when they try to seize the all-around movements during an intraday session. Maurice Kenny characterizes himself by proposing a simple focus, leveraging already known concepts like supply and demand but integrating them in a framework that considers the behavior of traders alongside simplicity as the right mindset to success. This is a good strategy to test in paper trading.

Maurice Kenny's Day Trading Approach

Maurice Kenny (MK) has a straightforward day-trading strategy that focuses on simply zone creations during intraday sessions in the market. We could say that, intrinsically, his proposal relies on support and resistance to price action in those areas.

However, MK goes beyond and develops his custom approach by identifying actual supply and demand zones to set up what he calls "high-quality trades" so day traders do not have to get involved in a lot of effort to time an intraday entry and exit and instead seek and draw a reliable zone to execute a simple trade for the day.

Maurice Kenny's day trade strategy covers three aspects as essential pillars for an effective execution:

1. Identify supply and demand.
2. Determine the market: is it an uptrend, downtrend, or sideways market?
3. The trader's behavior is a crucial part of correct risk management.

The Case Of Cryptocurrencies

For crypto markets, it is pertinent to point out that the market operates 24/7 in contrast to the stock market on which Maurice Kenny based his strategy.

In this sense, traders can not expect an opening price move but can yet follow the different sessions across Asia, Europe, and America. Also, can spot in the chart those moments where there is increasing volume and leverage on it to discover relevant zones.

It is important to point out too that the movements of cryptocurrencies are much more volatile than stocks. Such volatile conditions can invalidate potential supply and demand zones and result in confusing scenarios for most traders.

The 1-Hour After Technique: Identifying Supply And Demand

Maurice Kenny recommends drawing price zones in the chart 1 hour after the market opens. This technique is the essence of his strategy. For him, this is when the "invisible hand" behind the market, causing price movements, will leave a footprint. This footprint is a zone where a notable price action during that first hour took place and what traders should aim for.

He establishes some notions:

• If there is a significant price push in that first hour, there would be a demand zone that traders can draw.
• If there is a significant price decline in that first hour, there would be a supply zone that traders can turn to.

What can traders do next with that zone identification?

For MK, the next to do is setting alarms in that zone. Why? Well, the correct procedure for him is to wait for the price to return to that zone so it can experience a movement that may signal an entry setup.

For example, let's suppose that Bitcoin (BTC) at the European session opening starts rallying from 55250 to 56000. This movement is preceded by a big candle, suggesting strong momentum.

The momentum starting point (55250), according to MK, would be a zone of clustered orders (buying orders in this case), and as the market could not fill all these orders at once, there will remain "pending orders" in that zone, so if the price retraces to that price, that pending might push the price.

The role of setting the alarms

It will be a method for traders to "minimize the screen" and wait patiently for the price to return to the marked zone.

Identify A Maximum Of 2 Zones

According to Maurice Kenny, traders should only look for a maximum of two relevant zones. Following with the example of Bitcoin:

• 55250 price would be one zone. Where the rally started.
• 56000 price would be the second zone. Where the price retraced.

That second zone would not be rigorously a supply zone. It could be just a pullback area without any further weight. However, another situation to remark on this point, is that the second zone is also tradeable, and the method would be the same:

1. Setting an alarm.
2. Waiting for the price to retest the zone consequently.

This price dynamic leads us to conclude that MK also focuses on spotting highs and lows. To understand this and to confirm a pullback, traders must determine the market phase.

The Market Phases In Maurice Kenny's Strategy

Maurice Kenny highlights the importance of determining the type of market during a trading day. Typically, the market price moves between highs and lows, within sideways (range) and breakouts.

Together gives way to the market phases:

• Uptrend Markets
• Downtrend Markets
• Sideways

Resuming Bitcoin's example:

• In case the price breaks out above 56000, it would be making a higher high, and traders can spot an uptrend.
• If the price breaks out below 55250, it would be making a lower low, and traders can spot a downtrend.
• A sideways market will take place if the price ranges between 55k and 56k

For the breakout above or below, according to Maurice Kenny, traders will have a new scenario that invalidates the previous one, so they must identify and draw new supply and demand zones.

Patience: Trader's Behavior As Key To Success

• Use alarms to minimize the screen and wait for the zones to react.
• Looking at the chart for more than 10 minutes is a problem, according to MK.
• 1 clean trade per day is all a day trader needs.
• Get away from the screen while waiting for the zone to react if it takes longer.
• If any of the above is ignored, traders will force a trade.
• Use stop-loss orders for all trades.

Conclusion

Maurice Kenny takes the concepts of supply and demand to a mindset of simplicity and proposes a strategy for day trading based on straightforward movements.

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