When it comes to high probability trading strategies, the goal of each trader is to look for ways to ensure that every trade is successful. Not that everything will work the way we want it to but employing a few strategies that helps improve success in trading minimizes the probability of loss. Unlike the strategies employed in high profit trading, banking on realistic market indicators before opening a trading position lowers the chance of placing a risky trade, opens up opportunities for deeper market analysis, and trains the mind to critically think of newer ways to trade. Of the ample strategies offered by traders, here are the best ones:
Price action trading. The foreign exchange market is characterized by high volatility that at one point, you think everything’s fine and then suddenly, all indicator are going down. It can happen in a matter of seconds. As one of the effective ways in high probability trading strategies, price action trading is characterized by patience. Most traders cannot afford to live a day without buying or selling their currencies. It is with this inclination that bad trades are made because it is dictated by emotion. When you have the patience to wait, it means that the probability of your success improves as you continue to monitor activities in the market. At the right moment when all indicators are pleasant, you can open your position for trading.
Price and market dichotomy. While price action trading can stand alone among the high probability trading strategies, ignoring the market setting it occurs under will not make it highly effective. What you can do is concurrent with monitoring price action trends, you can analyze why it came to be that way based on prevailing market indicators. What drives a currency to appreciate? What drives it to depreciate? Remember that the political, economic, and social status of a country determines its currency’s volatility. Analyze them together to ensure that your position is secured before opening your position. In the foreign exchange trading world, this principle is called confluence.
Think and think again. The charts before you look perfect. You see a favorable relationship with price action and market context. It seems the best time to make the trade but before you hit the sell or buy button, think again. It is easy to be attracted to whatever is perceived beautiful but remember that you play on the scheme of probable success or failure. To do this, you can avoid trading on a one-hour chart basis. This time when the market is still full of distractions and clues can backfire on your position all of a sudden.
When you think about the high probability trading strategies that has worked for many of the traders you have met, do not be fooled thinking that doing the same will lead to the results you want. While these strategies are out there, no single technique has provided the most profit. Uncertainty is always a company and all you have to battle it with is the moment’s best strategy.