Hello and welcome to another edition of the bulls vs the bears. I know a while back we touched on How To Spot High Probability Trades and Run All The Way to the Bank. But how about we learn how to find the perfect high probability trade? For those who have no idea what I’m talking about, I suggest you read the post I just mentioned before you join today’s class.
You absolutely want to create an edge when you enter a trade on the market. I can hear somebody muttering under his breath saying “Hmmm…How do I do this?” Just pick a trade that has a high probability of giving you a decent profit. The moment you see an obvious pattern your brain should scream ‘BULL’S EYE.” That’s what I call your trading edge. That candlestick pattern should be so obvious that you dont need to think twice about entering the trade. If the conditions aren’t present just dont trade.
So basically we are going to learn various ways fo finding the perfect high probability trade So first off:
You Need to know How to use Support and Resistance Levels
One way of finding the perfect high probability trade is knowing how to analyze support and resistance levels. Let me give you a simple tip for trading support and resistance levels. If a resistance level holds, it means the bears are overwhelming the bulls. And if the reverse happens, the bulls have the bears number.
If you see an obvious resistance level, it can only mean one thing. That the bears are looking to go short(or put in orders to sell). And if there is a reverse scenario at the level of support nobody has to tell you that the bulls have put in their market orders to go long. Neither level can break until one party overruns the other. So for level of resistance to be breached the the bulls must destroy the bears. And for the reverse to happen at the line of support the bears must clear out the bulls. Let’s take a look at an example
Here the bears are resisting the bulls with all their might. The yellow marking suggests that the level or resistance is holding nicely.Once that happens the bulls run out of gas and the bears will take over proceeding and head for the bottom of the hill.
Mark Important Levels
Sure you need to know how to trade support and resistance levels. But you should mark the most important levels.Why? Because everybody is watching those levels like hawks. So you need to sharpen your tools in this regard. Please do not make the mistake of going intraday (looking at 1hr 4 hr time frames) or else you will be trading from a position of weakness.
One thing you need to understand is that high probability trades are long term trades. You’re talking about entering trades that will last for days, weeks, sometimes months, not to mention rake in huge profits as well. . You’d be better off looking at the daily, weekly or monthly time frames. Let’s look at an illustration of Gold facing facing resistance at the resistance level
The yellow markings represent the the important levels that I mentioned earlier. You need to be aware of these areas as they are going to be closely watched by other traders also. The red arrows point to to these marked areas. Just make sure when marking important levels, that these are the levels you want to locate your trades. You do not want to mark multiple levels just for the fun of it. Mark the levels you want to place your trades and once you mark those levels you place your take profit and stop loss orders.
That’s a wrap for “How To Find The Perfect High Probability Trade.” High probability trading is more than just entering trades. You need a flawless mindset and meticulous preparation. Not only will this strategy save you precious time, but you can easily recognize these trades because you know they are from daily levels.
As they say price action always rules. Just find trades that increase your chances of making pofits and your trade will be all the confirmation you need. The best place to put this into practice is your demo account. It’s the best lab there is as far as putting this strategy into practice goes. You then start looking for high probability signals at the key levels.
Til next time take care.
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