17
2024/05
5 High-probability trading opportunities to achieve greater profits
Trading master James Rogers once said, “I just wait until the money piles up in the corner, and then I walk over and pick it up. Otherwise, I do nothing.” What exactly does a “money-picking” opportunity, as described by the trading master, mean?
As we all know, the trading market consists of a series of trading days that form alternating price movements of ups and downs.
Successful traders look for high-probability trading opportunities on certain distinctive trading days to achieve profitability.
Below is a review of five types of high-probability trading opportunities that may greatly assist in your profitability.
1. Review of High-Probability Trading Moments
1.1 Strong trend trading days
What is a strong trend trading day? It is a day where the market is controlled by one-sided forces from opening to closing, with prices moving in one direction.
The risk is minimal at this time, making it an excellent opportunity to build positions in the direction of the trend. This is because the value range will usually continue, ensuring that profits can be exited within enough time without incurring losses.
1.2 Volatile markets with high/low closes
On days with fluctuating volatility but where the closing is at a relatively high or low within the range, it indicates that one side has achieved an imagined victory.
The early trend of the following week is usually favorable to the losing side. Building positions in the direction of the close at this time can be a wise move.
1.3 Breakout of consolidation zones
When a consolidation zone that has been maintained for a period is broken, the price movement will be swift and intense. This is because the market’s view of value has changed, and long-term forces are confidently entering.
At this time, you should promptly follow the breakout direction, catching the subsequent trend wave to achieve profitable runs.
1.4 Failed breakout traps
When the price fails to break through resistance (or support) levels, it usually returns to the original value zone with full force.
The longer the reference point period that was impacted, the wider the return range due to the concept of market equilibrium. At this point, you need to respond quickly and reverse your position to take advantage.
1.5 Gap openings
During the opening phase, due to the strong entry of long-term forces, a gap is formed, which acts as support or resistance. Building positions in the direction of the gap also has a high success rate.
Since there are various types of gaps, such as common, breakout, continuation, and exhaustion gaps, traders should combine the overall environment and clearly distinguish them before operating for a more secure approach.
However, in the investment market, losses are a compulsory lesson for every trader and are common in speculative markets. The listed trading opportunities are relatively safe and reliable but are only somewhat fail-proof.
2. Pairing with the Right Trading Strategy
Traders must have the correct understanding that to achieve market profitability; they need not only enough patience to wait for trading opportunities but also to formulate clear trading plans and take decisive actions, primarily reflected in the following four aspects:
2.1 Controlling trading emotions
It is almost impossible to have no emotional fluctuations when facing gains and losses in funds. Traders are often influenced by common emotions such as fear, greed, anger, and regret, which can cause them to lose rationality and become indecisive.
Traders who cannot manage their emotions often fall into cycles of impulsiveness, ignoring risks, or becoming hopeless about opportunities, allowing emotions to dominate their investments, ultimately leading to failure repeatedly.
A mature trading expert will not let emotions and feelings influence their trading decisions and will treat market fluctuations and operations rationally and objectively.
2.2 Controlling trading funds
The topic of fund management may be old, but in practice, only some traders can strictly adhere to their disciplines and principles. In fact, those who experience margin calls are almost always aware of the risks of heavy positions.
Still, during trading operations, the greed for profit can drive them to stake everything on their trades in hopes of occasional big wins.
Using heavy positions as a habit in trading is extremely dangerous. Even if a trading opportunity is carefully waited for, heavy positions can expose funds to greater risks, making it not worth the gains.
2.3 Controlling trading rhythm
Trading is not about working hard to get rich; it does not require constant trading. Trading can be done, but there must be a personal model, a mature market sense, and adherence to one’s principles and discipline.
In reality, many traders believe that being idle means losing the excitement of trading, and they cannot stay idle. As long as there are funds in the account, they react impulsively to any slight market movement, entering trades without any systematic plan.
2.4 Controlling trading losses
There is no invincible general in the market; experiencing losses is normal. Many traders, when facing trading losses, may feel helpless, resign to fate, or hold on to false hopes, ultimately resulting in repeated or significant losses. This leads to not only financial loss but also a loss of confidence.
In fact, traders can reduce trading losses by controlling the extent and frequency of losses by setting stop losses and adhering to trading principles.
