Patience is a virtue – and it works well for cautious traders who want to feel a certain degree of assurance when working in the very volatile forex market. High probability trading as a strategy works best for those who do not have the appetite for the vigorous day trading activities. Implemented properly, going for high probability trades can be no less profitable than day trading. While day traders balance off gains and losses in their trades, a high probability trader only has mostly winning trades to tally. This is not to say that high probability traders do not experience any losses. But, since their trades are also highly calculated, these high probability traders are able to avoid the losing streaks that most day traders endure on their way to their profitable trade.
Here’s how to put a high probability trading technique to action:
Have a trading plan. High probability trading, or any kind of trading, would not succeed without a plan. Think about what you want to achieve with your trading, how much money you are willing to put in your trading account, what indicators to use in your trades, and what levels of risks to get into. These are just some of the things that you have to take into consideration when devising your trading plan. If all these seem to be too overwhelming for you, you have to take things a step at a time. Try a demo account with as close to your real circumstances as possible and then test your trading plans and strategies. When you feel comfortable with you plan, you can put money into a real account and get into high probability trading to manage your trading risks carefully.
Learn to read your charts. You cannot get away with not being able to do technical analysis. If you want to be in the trading game for long, you have to know how to read your forex charts. There are different charting models that would show you price action in a graphical presentation. Understanding how to read these charts will also help you spot price action setups and implement your trades. Paying particular attention to longer time frame charts is also highly recommended in high probability trading. These longer time frame charts keep your attention away from the price movements that could make you emotional about your trading plan.
Get expert advice. High probability trades are only possible when you understand the kind of price action setups that you are looking for. There are indicators that you have to have a good grasp of in order to tell whether it is time to make a profitable trade. Support and resistance levels as well as overbought signals are some of the other indicators that you have to watch for in your trading charts. Online forex trading experts would be able to give you advice on how to get into high probability trading. You can also validate your own trading plan and decisions with advice from these trading experts. Although this trading technique gives you better chances at profitability, these experts will tell you that there are no guarantees that even the strongest price action setups and indicators can indeed result in profits.
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