It cannot be denied that novice traders have to choose between high-profit and high-probability trading approaches. As to be expected, those who properly take their inexperience into account would pick the latter. After all, high-probability strategies often yield sufficient profits without exposing traders to considerable risks. It should be emphasized however, that even when employing a high-probability technique in trading currencies, it would still be necessary to keep a few reminders in mind so as to increase one’s chances of attaining success. Those who wish to learn about such pointers should read on.
Upon gaining a bit of experience in trading currencies, most people begin to ask a certain question: is there a trading method that shines in both probability and profit? To put it simply, such a trading approach does not exist. To explain, strategies are synonymous with compromises: as one focuses on profit, one loses the chance to enjoy low-risk endeavors. It is for this very reason that those who rely on high-probability trading techniques are not able to earn big in a short amount of time. One should always remember though, that the term “compromise” is often associated with fine-tuning opportunities.
Indeed, some forex traders manage to develop their very own trading strategy that reflects their preferred levels of risk and profitability. Despite having the capability to accomplish such a feat however, they tend to overlook an important fact: volatility does not immediately bring forth risks. In particular, experienced forex traders who make use of high-probability trading approaches know that it is a must to focus on the matter of risk scaling. Even though high volatility currency pairs are much riskier than their low volatility counterparts, it does not mean that it would be impossible to find relatively low-risk prospects among the former.
Aside from keeping in mind the information discussed above, it would also be crucial to remember the following: it is imperative to pay attention to long time frames. Of course, there are those who would argue that by just keeping watch of fluctuations exhibited on hour-long charts, it would be possible to make the most out of each trading day. It should be emphasized that high-probability trading is not a pursuit merely based on deal quantity: being sure of the risk levels associated with a certain opportunity is of utmost importance. Thus, before engaging in transactions, taking time to check 3-hour charts to further evaluate probabilities is a must.
Making money through forex trading requires sufficient knowledge. To reiterate, searching for a trading method that excels in both profit and probability is a time waster: instead, one should exert effort to find or develop a strategy that has a risk-to-reward ratio that suits one’s preferences. As also pointed out, it is wrong to overlook currency pairs that are not classified among those with the lowest volatility values. Of course, spending enough time to assess 3-hour charts for the sake of certainty is vital as well. All in all, high-probability trading is not as simple as many believe it to be.