‘When it rains gold, put out the bucket, not the thimble’ is one of the many quotes by Warren Buffet that I love. More Importantly, I have highlighted it at the beginning of this article as it is relevant to our topic. We shall indulge more on what message Mr. Buffet was trying to pass across. That being said, What is high probability trading? What does it entail? What skills or strategies do traders need to employ in the market to be in the smaller margin/percentage of traders that make consistent money in the market?
Anyone can be a trader. As long as you know how to open a couple of positions in the markets, with little knowledge of price action, fundamental analytical skills, and risk management, you qualify to be a trader. However, few people in world are successful professional traders. By successful we imply consistent profitability in the markets year after year. Our sole goal at Fourthstreet Consultants is to create a community of successful high probability traders that can make money consistently in the market, thereby earning a living solely from trading the markets, if they wish to specialize.
High Probability trading can be achieved by having a low risk/high profit ratio. Professional traders’ sole goal in the market is not to open as many positions as their capital allows, but to trade the markets with the odds in their favor. What if I told you today that you only need a couple of trades every month to be profitable consistently in the market? Three or four trades a month are enough to have an edge in the market. This is the highlight of this article. At this point, we revisit Warren Buffet’s quote, ‘when it rains gold, put out the bucket, not the thimble.’ This statement was meant to awaken traders understand that good opportunities to trade in the market come infrequently. There is always few good opportunities to open positions at any one moment in the forex markets. If you are looking for high probability trading opportunities, you got to be patient, not to open trades out of anxiety or boredom, the goal is to do nothing the meantime, preserve your capital, and then go big when the ‘big’ boys are moving the markets. I hope you roger that point!
One of the most rewarding strategy to identify the best trading opportunities is by applying price action strategies. This involves studying chart patterns, trends, channels and related pointers. More often, high probability trading opportunities are found within a trending market. Counter trend dips might earn you a few pips, but you will end up losing the opportunity to catch the big moves when market is correcting to rejoin the long term trend. And this is where money is made. The best part with trading within a trend is that it allows traders to risk less, and earn more, which is the ultimate goal of any trader who is trading forex as a business.
Attaining such skills to identify high probability trading opportunities in the market, and the discipline of patience to preserve your capital long enough to rip from the big market moves, requires one to invest in a comprehensive reputable trading course and mentorship from traders who have a proven track record in the market. Invest in education, earn the experience, and soon you will find yourself on the road to financial independence and a career in trading the financial markets.