The discretionary method provides the advantage that traders can make a final judgment whether any one particular setup has a decent probability of succeeding. In that way, traders can choose higher quality setups and ignore lower quality setups within their strategy. This article explains a simple tactic that helps Forex traders recognize the high probability trade setup s with help from a few trading setups examples.

You can also take our Trader Profile Quiz. New information is available on all currency pairs and all time frames every minute. The market is basically in constant change and each moment offers the potential for a new setup. Many of these moments, however, do not provide an edge to the trader. These setups do NOT offer a distinct advantage and have a low probability of success. Setups with a high probability of success have a certain scarcity.

The Forex trader must wait patiently for these setups to occur, like a tiger waiting for its prey, and then execute with discipline when the moment arrives. This is when introducing the concepts of decision spots and triggers are crucial! Decision spots are important and key levels of the time frame of your choice.

This is critical because setups in the middle tend to be of lower probability and setups at key levels are of higher quality. First of all, it does not cost a trader any money. Most importantly, traders do not have to worry about missing a setup, chasing a setup, entering a setup too soon, etc. It is an enormous help for remaining patient and keeping the discipline needed to succeed in trading.

Plus traders can avoid revenge trading by keeping a cool mindset. Taking too many doubtful trades can easily lead to overtrading which leads to a slippery slope where a trader wants to earn back their money quickly. The trigger is the signal of interest a trader is waiting for. The trader has been patiently waiting for the price to move to one of their decision spots.

The trigger provides confirmation on how to trade at the decision level. It provides clues whether a trader will go long or short, or in other words whether they will take the break or bounce. Each Forex trader can choose their own indicators, tools, patterns, trends, and support and resistance for the roles of decision spot and trigger. There is no right or wrong method and you should pick something which you like to use and that matches your trading plan and psychology.

With that said, I will now present to you my own preferences for various decision spots and triggers and it is up to you if you use the same. For decision spots, my number one tool is the strike trigger candle and trend lines. Runners-up are support and resistance , patterns, and moving averages. For triggers, my number one tool is the candlestick and candlestick patterns.

Runners-up are fractals and trend lines. Here is an example: the price is in an uptrend but far from support. After a while, the price moves back to the support trend line.

The trend line is the decision spot. Price can then show 2 different reactions via candlesticks. Hence the candlestick pattern is the trigger:. Other sweet spots can be identified by using the concepts of impulse and correction. Price is always in either of the two and it depends on the strategy for which one is better for you. For my own trading, I prefer catching the completion of a correction, the middle of an impulse and also the start of the impulse.

I try to avoid trading the end of the impulse, the start of the correction, and the middle of the correction. Our top favorite day trading setups include setups that have been the most profitable for us like:. The basic premise behind the breakout setup is to enter right when the price breaks a key level. Now, a key level can be anything from simple support or resistance level, a big round number, a moving average, previous swing high or swing low, etc.

A recurring intraday setup you can use every single day in the forex market is the London range breakout setup. You can learn more about this setup here: How to Trade the London Breakout Strategy with One Trick. Usually, at the start of the London and New York session, the forex market will start with strong impulsive waves. But, since nothing moves in a straight line, the price will often pull back giving us another opportunity to enter the market.

Your entry with this setup is going to be once the pullback starts to fade away and the chart prints the first red candle for bullish pullbacks or green candle for bearish pullback. Catching these types of scalping setups only work if you already have established a directional bias. If you want to learn more about how to establish a directional bias check our guide here: OHL Strategy for Day Trading.

Pivot Points is a great indicator to gauge dynamic support and resistance levels. This chart setup method provides low risk high reward chart setups for trading in the direction of the primary trend, and this chart setup method works on all 28 pairs we follow. Forex setups for swing trades is when a currency pair is in an uptrend, then moves strong against its trend for a couple of days, enabling a trader to buy the pair at a lower price while still trading in the direction of the trend.

Similarly, when a currency pair is in a downtrend, then the pair moves up strong against its trend for a couple of days, enabling the trader to sell the pair at a higher price while still trading in the direction of the trend.

Either situation is a forex setup on the charts, as the pairs are "setting up" for moves back into the trend. When the charts set up this way, traders can enter the trade at a much better price while still trading in the direction of the trend. This lesson is not too difficult to understand but is valuable, and works very well in trending markets.

This same trading technique also works, and is widely used for trading other asset classes and markets including stocks, indexes, and commodities. To determine the major trend and the forex setup on the charts on the smaller time frames, traders will need a set of trend indicators. Traders can use our free forex trend indicators for multiple time frame analysis, and set them up on their trading platform.

Look for a currency pair that is in a pretty strong intermediate or long term uptrend but cycled down for a couple of days. We refer to this as a "forex setup", "trade setup" or "swing trade setup".

Look at the example below:. If a currency pair is trending up on the D1 time frame, for example, then the M30 time frame cycles down, then you can enter the trade when the M30 time frame reverses back into the trend going up. Second example: If a currency pair is trending up on the W1 time frame, for example, then the H4 time frame cycles down, then you can enter the trade when the H4 time frame reverses back into the trend going up.

When the pair cycles down, then reverses back up, the reversal point support level is called a "relative low" and your initial stop order goes right below it. Traders can intercept the reversal point and subsequent movement back into the trend several ways.

One way is to set an audible forex price alert to monitor the pair, another ways is to monitor our real time trade entry tool, The Forex Heatmap ®. Traders can also monitor the forex news calendar. This forex setup method results in more confident entries, better stop placement, and excellent risk versus reward ratio. This chart situation occurs relatively frequently across all 28 pairs we monitor, especially in trending markets.

by TradingStrategyGuides Last updated Nov 1, All Strategies , Forex Basics , Forex Strategies , Trading Psychology , Trading Survival Skills 7 comments.

The Forex market is constantly offering lower and higher quality trade setups. It is our job as traders to scan, recognize, select, enter and exit the ones with the best odds and reward to risk.

The best way is via a strategy. A Forex strategy helps identify setups with a long-term edge because it allows traders to analyze the charts with a fixed process and rules. Traders can tackle the market either via a discretionary or non-discretionary system.

The discretionary method provides the advantage that traders can make a final judgment whether any one particular setup has a decent probability of succeeding.

In that way, traders can choose higher quality setups and ignore lower quality setups within their strategy. This article explains a simple tactic that helps Forex traders recognize the high probability trade setup s with help from a few trading setups examples. You can also take our Trader Profile Quiz. New information is available on all currency pairs and all time frames every minute. The market is basically in constant change and each moment offers the potential for a new setup.

Many of these moments, however, do not provide an edge to the trader. These setups do NOT offer a distinct advantage and have a low probability of success. Setups with a high probability of success have a certain scarcity. The Forex trader must wait patiently for these setups to occur, like a tiger waiting for its prey, and then execute with discipline when the moment arrives.

This is when introducing the concepts of decision spots and triggers are crucial! Decision spots are important and key levels of the time frame of your choice.

This is critical because setups in the middle tend to be of lower probability and setups at key levels are of higher quality. First of all, it does not cost a trader any money. Most importantly, traders do not have to worry about missing a setup, chasing a setup, entering a setup too soon, etc.

It is an enormous help for remaining patient and keeping the discipline needed to succeed in trading. Plus traders can avoid revenge trading by keeping a cool mindset. Taking too many doubtful trades can easily lead to overtrading which leads to a slippery slope where a trader wants to earn back their money quickly. The trigger is the signal of interest a trader is waiting for. The trader has been patiently waiting for the price to move to one of their decision spots. The trigger provides confirmation on how to trade at the decision level.

It provides clues whether a trader will go long or short, or in other words whether they will take the break or bounce. Each Forex trader can choose their own indicators, tools, patterns, trends, and support and resistance for the roles of decision spot and trigger.

There is no right or wrong method and you should pick something which you like to use and that matches your trading plan and psychology. With that said, I will now present to you my own preferences for various decision spots and triggers and it is up to you if you use the same. For decision spots, my number one tool is the strike trigger candle and trend lines. Runners-up are support and resistance , patterns, and moving averages. For triggers, my number one tool is the candlestick and candlestick patterns.

Runners-up are fractals and trend lines. Here is an example: the price is in an uptrend but far from support. After a while, the price moves back to the support trend line. The trend line is the decision spot. Price can then show 2 different reactions via candlesticks. Hence the candlestick pattern is the trigger:. Other sweet spots can be identified by using the concepts of impulse and correction.

Price is always in either of the two and it depends on the strategy for which one is better for you. For my own trading, I prefer catching the completion of a correction, the middle of an impulse and also the start of the impulse.

I try to avoid trading the end of the impulse, the start of the correction, and the middle of the correction. Our top favorite day trading setups include setups that have been the most profitable for us like:. The basic premise behind the breakout setup is to enter right when the price breaks a key level. Now, a key level can be anything from simple support or resistance level, a big round number, a moving average, previous swing high or swing low, etc.

A recurring intraday setup you can use every single day in the forex market is the London range breakout setup.

You can learn more about this setup here: How to Trade the London Breakout Strategy with One Trick. Usually, at the start of the London and New York session, the forex market will start with strong impulsive waves. But, since nothing moves in a straight line, the price will often pull back giving us another opportunity to enter the market. Your entry with this setup is going to be once the pullback starts to fade away and the chart prints the first red candle for bullish pullbacks or green candle for bearish pullback.

Catching these types of scalping setups only work if you already have established a directional bias. If you want to learn more about how to establish a directional bias check our guide here: OHL Strategy for Day Trading. Pivot Points is a great indicator to gauge dynamic support and resistance levels. One of the easiest trade setups using pivot points is to buy at support and sell at resistance. When the price interacts with these pivot points it can sometimes produce a decent amount of momentum for a nice quick profit.

If you want to learn the basics of pivot points and how not to use them, check our guide here: How to Trade with Pivot Points the Right Way. A trade setup represents the total number of trading conditions that need to be satisfied before you consider entering a trade.

The average income of a day trader depends on the account balance and position size per trade. The best option trading strategies is the long Call and long Put strategies. The long call strategy profits if the stock price is above the strike price at expiration.

At the same time, the long put strategy profits when the stock price is below the strike price before the expiration. Finding a good trade setup comes down to your ability to correctly read the price action. A rule-based trading process is the best way to look after a trade setup. The best setup for trading is the one that works best for you. Something that might work for one trader might not work for another trader.

I use the concepts of decision spots, triggers, confluence, and wide-open space to judge the best and highest probability setups. We specialize in teaching traders of all skill levels how to trade stocks, options, forex, cryptocurrencies, commodities, and more.

Our mission is to address the lack of good information for market traders and to simplify trading education by giving readers a detailed plan with step-by-step rules to follow. In binary trading there are high level of risk which you must be willing to accept in order to be able to invest and trade to make winnings,today I thank God that I am an expert in binary trading who has taught others the strategies on binary and forex trade in order to win trade and am still willing to teach with prooves whosoever is interested to know how I made it big in binary and forex trading.

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High Probability Trade Setups: 4 Methods by TradingStrategyGuides Last updated Nov 1, All Strategies , Forex Basics , Forex Strategies , Trading Psychology , Trading Survival Skills 7 comments.

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