Today I stop to reflect on the conditions of probability with which a trader has to battle every day. I will try to answer why the traded strategies or patterns do not always lead to success and other times they lead to excellent entries (or exits).
Trading & Success probability concept
It has been shown that by consecutive flipping a coin a large number of times, the probability of getting Heads or Tails on the next roll is around 50%.
If we decide to evaluate Heads out after 4 consecutive crosses, most likely the probability of getting Head will be 50% higher even after a large number of times.
If we decide to evaluate Heads after 5 Tails the probability increases … and increases after the number of consecutive trades increasing … 6,7 or 10 Tails released in succession.
In online trading, every random entry has an initial 50% chance of success.
So how do we create a greater probability that can help us create profits?
Trading Room for spread trading
There are 2 dedicated telegram channels for spread trading updates:
Trading indicators and strategies
The application of trading signals generated by strategies or indicators therefore has, after numerous inputs, the probability of success at 50%. Ichimoku, HeikenAshii, Supertrend, RSI and anything else does not allow to increase the probability of success especially if the inputs are not filtered with some particular rule.
The pure and consecutive crossing of 2 moving averages will not generate profits, this is a fact.
The trader’s MindSet
Like Michael Jordan said “i never lost a game, i just ran out of time”.
The trading signals generated by some system or indicator (for example crossing of 2 moving averages) can create a probability of success greater than 50% if we choose to filter the inputs. In this case I am not talking about a technical filter but a mindset, an approach to trading and prices.
The basic concept for making money is to buy when the price is profitable and sell when it is overestimated.
Every trade is very difficult to prepare
- It takes time to develop an edge.
- it takes time to master entries.
- it takes time to master exits.
- it takes time to find the strategy that matches your personality.
- It takes time to undo your bad habits.
- And most importantly, it takes time to master your cunty emotions.
Golden rules that I learned from my experience as a trader
When you want to enter a position it is therefore always good to evaluate the following points:
- Buy low (lower than our studied price) or sell short at the highest possible price
- If the price is not executed then we have lost an opportunity but not money
- Studying short-term volatility with Bollinger Bands and Pivot Point
- Study the intraday and daily swing points
Charts signals on Cocoa, GOLD, EURUSD and Coffe
In the following examples we have applied the concept expressed previously in which a trader’s mindset is required only on certain price levels. In the examples there are some notes I shared in the free trading room https://t.me/spreadtrading24
and for the inputs I helped myself with our indicators on Kumo Breakout, Supply & Demand and with the intraday swings on pivot.