One of the top things every successful trader should know about is high probability trading strategies. This refers to trades that have very little risks but also very little reward for the trader. Typically, they are backtested to ensure that traders will get profitable results from investing on the trade. This is one of the biggest attractions of high probability training. Since no one really wants to start losing money on Foreign Exchange, high probability trading strategies provide a layer of protection for the trader despite the low income margin.
Using the Charts
Of course, the use of charts should never be forgotten as one of the top high probability trading strategies. Visual aids like bar graphs, line graphs and candlestick charts help traders plot the trajectory of past trades. More importantly, it provides them the data needed to make accurate guesses on the movement of the market. With this kind of information, a trader gets a bigger chance of earning from the process.
Choose Providers Correctly
Aside from the charts, the Foreign Exchange market is also home to a wide array of highly useful tools, most of which can be supplied by a good broker. This is why the best traders only go to the best brokers that can provide them with excellent platforms. Brokers should also provide accurate charts and good spreads that will help their traders earn money. The timeliness of the information is also crucial especially when devising strategies.
Understand the Underlying Factors
Relying heavily on charts is well and good, but going beyond that is better. Good traders know to question specific occurrences and ask why particular price movements are occurring. What are the underlying factors that seem to have triggered the condition and what can happen that will stop the upward/downward movement? By knowing this, traders will be at a much better position to make accurate predictions.
Establish a Stop Loss
With Foreign Exchange trading being so volatile, it isn’t surprising that some people hold on to a profit thinking that it will get bigger after a few minutes. Unfortunately, this isn’t always the case. A good trader will know exactly when to cut their losses and let a specific possession go to halt their losses. Ideally, a stop loss should be established by the trader so that they wouldn’t find themselves losing more than they have earned.
Specializing on a Trading Type
There are several types of traders today including day traders, trend followers, swing traders and long term traders. One of the most common high probability trading strategies is by specializing on one of these trading types. By doing this, traders will be able to narrow down their focus and trader more effectively within that type.
Of course, those aren’t the only strategies that could be followed during situations like this. Keep in mind that Forex is a highly extensive industry that operates under several factors. If you want to be a successful trader, then it only makes sense to learn as much as possible about the market to develop new techniques and strategies.