4 “When and Where”s of High Probability Setups
We hope you took advantage of our chapter in the eBook that detailed some of our top methods for using key indicators along with price action to generate serious income.
Today, I want to quickly highlight one of our most powerful methods which simply looks at 4 places that have high probability trades day in and day out.
You have heard about high-probability entry setups, and you probably wonder if they really exist.
While there is nothing certain in trading in terms of whether a setup will win or lose, we can be precise and exact about our thoughts and actions.
Take support and resistance as an example: When price is coming down to a certain level that has rejected price in the past, we don't know if price will hold. Using the term "potential" support is more exact and using that terminology keeps your head in the game by reminding you that the “support” area has not guarantees of holding anything and therefore will help you not get caught in a bad trade.
4 “When and Where” of High Probability Setups
1. Look At The Primary Trading Session Open For Trading Setups
For many markets, the primary session open is naturally a time when there’s a good chance to see a decent move. This is because participants are at their most active at this time.
When the money is flowing, it’s often following technical cues more accurately due to all the volume and like-minded traders pouring orders into the market at one time. This will help you find setups that are more likely to follow through to your targets.
2. Session and Range Gaps Make For High Probability Trades
In the same way, a market that has gapped away from the closing price, ideally beyond the high or low of the prior session, is showing that either it’s moving strongly in that direction and is likely to continue or traders have got ahead of themselves and will need to cover their positions as the market retraces the gap.
By analyzing conditions and making an evidence-base decision on which state the market is in, you can be ahead of the pack and put yourself in a high potential win-rate trade.
3. Strong Impulse Moves Can Show you Another High Probability Setup
When you get a strong move in a market, there’s often at least one secondary attempt in the same direction, following the pullback.
When there is already momentum in the market and a pullback finds support to continue in the initial, impulse direction there is a higher likelihood for a potential continuation move that traders can take advantage of.
4. High Probability Trading Setups With Balanced Or Ranging Markets
Balanced or ranging markets, have at least two reliable places where something is bound to happen at. These are the extremes of the balance.
If you can accurately identify what is likely the highest high and lowest low of a balanced market, you can find lots of high probability setups in those ranges.
If you’d like to learn exactly how we pinpoint these 4 High Probability setups, plus 7 more strategies using indicators you should grab our Income Indicators eBook - Using Price Action to Create a Lifetime of Income