FOREX DAWN| High Probability Trades Only Please

Just wanted to look at this Sterling Yen chart which really is an amazing pair, and although I am not in any way attached to currencies as in a favourite little friend, this one comes out pretty rock ‘n’ roll in my top movers list. These shocking pink head and shoulders patterns, which we can find on all time frames, contain some serious moves with plenty of momentum and can help in the identification of areas where the big money may be sitting with orders. These areas are where we hopefully can hitch a ride to some important moves whilst keeping our risk in the market at an acceptable level depending on our MM plan.

The simple upward trend line, with corresponding horizontal resistance could have provided a way into the market where our technical analysis had created a high probability entry order with low risk and a potential 60pip first target. Remember there are no guarantees, and our analysis is only zooming us in closer and closer to the trade that is most likely to go in our favor based on historical evidence. The market never makes a false move, I talk about false breakouts a lot of the time, but of course their not false, they just don’t fit into my little trading picture, but they are very real and true.

In this GY chart example our trend line has been tested several times and held. What this starts to create in our trading mind is an idea of what the big money is looking at, are they looking at this same trend line? if they are then the probability of trading with them just increased. The next time the price arrives at the line we can place our trade and have a plan already built-in so as to keep our subjectivity out of the button pushing. We will have certain expectations for the trade and the means to get out quickly if things go against us.

On the Sterling Dollar chart we can recognise how for the last week the price has prefered to stay in this 130pip range with some little excursions higher and lower that have met swift opposition. This is important intelligence to be able to understand the overall feeling traders have of the pair. We can apply S&R lines from higher time frames and look for smaller time frame entry points, only of course for trades that carry a high probability of success. This is the way I trade profitably, I do have losses but they are kept to a minimum because I won’t just take any trade, and this inevitably means that my trades can be infrequent, that’s not a worry for me. I know and believe that good set-ups exist a lot of the time and it’s only a matter of choosing the highest probability ones to end up being a winner in forex. This is what I would like novice traders to know and believe as well.

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