High Probability Trading

Whether you are interested in foreign currency and Forex trading or any other type of trading, it is always going to be a matter of probabilities. Trading in general is a matter of probabilities and this is something that people don’t really understand at times. While the most important thing a person needs to be a successful trader is discipline, close behind that is a working knowledge about the theory behind the type of trading they are going to do. The theory behind all kinds of trading, regardless of the specifics, has to do with probability.

If you are familiar with terms like return on investment, risk versus reward and all of the synonymous phrases, then you are probably familiar with the fact that they refer to probabilities. If the probability of a trade reaching a certain level is x percent and the return on that trade is y percent, then you should go for the trade if y is greater than x. In other words, if the reward outweighs the risk, then you go for it. This is the basic principle of all kinds of trading but for some people, they are not interested in pursuing every net plus opportunity. They only want to be involved in high probability trading.