Do you want to find high probability trading setups?
Look at the cases below.
Instead of looking at price, you’re looking at indicators to find the trend (without understanding the purpose of it).
Instead of following a trend, you’re trying to predict market reversals.
Instead of proper risk management, you put huge money on a bet because you feel good in that trade.
If you’re doing any of the above cases, then it will be difficult to identify high probability trading setups.
As all know, there are basically two types of trend, uptrend or downtrend. If the price is in an uptrend, you should stay long. If the price is in downtrend, you should stay short.
So, to have a high probability trade setup, you should understand the concept of buy at low and sell at high or vice versa. But the real question here is to know when the stock will stop from falling further low.
As there is no clear answer, we should work with a strategy.
For highly probable trade, first, identify the support and resistance level on a daily time frame. For better approach, try to find stocks that are near double top/ bottom. A double top/ bottom, there are great chances that the stock again will face resistance.
Now, when the stock is near a double bottom, check if the stock is giving rejection at such level. If the stock is giving multiple rejections, then it confirms the support at that level.
Now, confirm the trend on a two-hour chart. If the stock is giving confirmation at a two-hour chart. Then that stock can be used for our trade.
If we can find this stock which confirms the trend on a daily and two-hour time frame, there is a possibility that this trade can be a high probable trade.
Before making an entry into that stock, try to calculate the risk to reward ratio. If you are getting at least 1:3 or 1:4 or 1:5, then buy or sell that stock based on analysis.
If you follow this approach for all the stocks, there is a great chance that you will be in profit at the end of a month.
These kinds of trades can be traded if you have proper understanding of risk management. At pathfinder trainings, we teach how to trade for maximum profit using pathfinder strategies. Our focus is on risk management and identifying high probability trade setup.