High Probability Trading Strategy

Do you want to find high probability trading setups?

I’m sure you do, right? (Or you won’t be reading this right now)

But the thing is…

…you’re not sure how.

Instead of looking at price, you’re looking at indicators (without understanding the purpose of it).

Instead of following trends, you’re trying to predict market reversals.

Instead of proper risk management, you put on a huge bet because this trade “feels good”.


If you’re doing any of the above, then it will be difficult to identify high probability trading setups.

But don’t worry.

I’ve got good news for you.

Because in this post, I’ll teach you step-by-step on how to find high probability trading setups.

The trend gives you the biggest bang for your buck

The definition of the trend is this…

Uptrend – consists of higher highs and lows

Downtrend – consists of lower highs and lows

If you want to know where’s the path of least resistance, look left (and follow the trend).

When the price is in an uptrend, you should stay long. When the price is in a downtrend, you should stay short.

By trading with the trend, you can see that the impulse move (green) goes much more in your favor, compared to the corrective move (red).

Here are a couple of examples…

Now you’re probably wondering:

Rayner, identifying a trend looks easy. But how do I enter an existing trend?

And this is what we’re covering next…

Trade in the direction of the general market. If it’s rising you should be long, if it’s falling you should be short. – Jesse Livermore

How to identify areas of value on your chart

You’d probably heard of the saying, “buy low sell high”.

But the question nobody asks is…

…what’s low and what’s high, right?

This is where Support & Resistance comes into the picture.

Support & Resistance

And this is the definition of it:

Support – an area with potential buying pressure to push price higher (area of value in an uptrend)

Resistance – an area with potential selling pressure to push price lower (area of value in a downtrend)

Here’s what I mean…

Dynamic Support & Resistance What you’ve seen earlier is what I call, classical Support & Resistance (horizontal lines)

Alternatively, it can come in the form of moving average. This is known as dynamic Support & Resistance (and I use the 20 & 50 EMA).

This is what I mean…

Not only does support & resistance allows you to trade from an area of value, it improves your risk to reward and winning rate as well.

Now, another “trick” you can use is to use overbought/oversold indicators.

High probability trading — using Stochastic to identify areas of value

A big mistake most traders make is, going short just because the price is overbought, or oversold.

Because in a strong trending market, the market can be overbought/oversold for a sustained period of time (and if you’re trading without stops, you risk losing your entire account).

Here’s what I mean:

Now you’re wondering:

How do I use Stochastic to identify areas of value?

Here’s the secret…

Are you ready?

In an uptrend, you only look for longs, when the price is oversold.

In a downtrend, you only look for shorts, when the price is overbought.

Here’re some examples:

If you follow this simple rule, you can “predict” when a pullback will usually end.

So, you’ve learned how to identify areas of value on your chart.


…you’ll learn how to better time your entries.

How to enter your trades

There’re 3 ways you can enter a trade:

  1. Pullback
  2. Breakout
  3. Failure test


A pullback is when price temporarily moves against the underlying trend.

In an uptrend, a pullback would be a move a lower.

Here’s an example:


In a downtrend, a pullback would be a move higher.

An example:

According to the work’s of Adam Grimes, trading pullbacks has a statistical edge in the markets as proven here.

You may wonder:

What are the pros and cons of trading pullbacks?

Advantages of trading pullbacks:

  • You get a good trade location as you’re buying into an area of value. This gives you a better risk to reward profile.

Disadvantages of trading pullbacks:

  • You may potentially miss a move if the price doesn’t come into your identified area.
  • You’ll be trading against the underlying momentum.


A breakout is when price moves outside of a defined boundary.

The boundary can be defined using classical support & resistance.

Breakout to the upside:

Breakout to the downside:

You’re wondering:

What are the pros and cons of trading breakouts?

Advantages of trading breakouts:

  • You will always capture the move.
  • You are trading with the underlying momentum.

Disadvantages of trading breakouts:

  • You get a poor trade location as you’re paying a premium.
  • You may encounter a lot of false breakouts.

Failure test

This technique possibly originated from Victor Sperandeo, and the works of Adam Grimes shows that it has a statistical edge in the markets.

It works like this…

You’re entering your trade when the price does a false breakout of Support/Resistance. Thus taking advantage of traders who are trapped from trading the breakout.

This entry can be applied in a trending or range market.

Here’re a few examples…

Failure test at (BCO/USD):

Failure test at (USD/SGD):

Failure test at (EUR/USD):

Now, the next thing you’re going to learn is…

How to set your stop loss

Place your stops at a point that, if reached, will reasonably indicate that the trade is wrong, not at a point determined by the maximum dollar amount you are willing to lose. – Bruce Kovner

I’m going to share with you 3 ways to do it:

  1. Volatility stop
  2. Time stop
  3. Structure stop

Volatility stop

A volatility stop takes into account the volatility of the market.

An indicator that measure volatility is the Average True Range (ATR), which can help set your stop loss.

You need to identify the current ATR value and multiply it by a factor of your choice. 2ATR, 3ATR, 4ATR etc.

In the example above, the ATR is 71 pips.

So if you were to place a stop loss of 2ATR, take 2*71 = 142 pips

Your stop loss is 142 pips from your entry.


  • Your stop loss is based on the volatility of the market
  • An objective way to define how much “buffer” you need from your entry


  • It’s a lagging indicator because it is based on past prices

Time stop

A time stop determines when you exit your trades based on time.

Instead of exiting your trades based on price, you exit your trades after X amount of time has passed.

You need to define how much time you will allow before exiting it.

An example:

You took a short trade at resistance area. But after 5 days it’s not going anywhere, so you exit your trade.


  • You reduce losses
  • If you have trading records, you can identify the optimal amount of time to give your trades


  • You may exit prematurely only to see price move in your favor

Structure stop

A structure stop takes into account the structure of the market and set your stop loss accordingly.

An example…

Support is an area where price may potentially trade higher from. In other words, it’s a “barrier” that prevents further price decline.

Thus, it makes sense to have your stop loss below Support. Vice versa for Resistance.

Here’s what I mean:

You want to place your stop loss where there is a structure in the market that can act as a “barrier” for you.


  • You know exactly when you’re wrong because the market structure has broken
  • You’re using “barriers” in the market to prevent the price from hitting your stops


  • You need wider stop loss if the structure of the market is large (this results in a smaller position size to keep your risk constant)

Now, let’s move on…

What is confluence and how it impacts your trading

Here’s the thing:

You’re not going to enter a long trade just because Stochastic is oversold, or the market is in an uptrend.

You’d need additional “supporting evidence” to give you the signal, to enter the trade. And this “supporting evidence” is known as, confluence.

Confluence is when two or more factors give the same trading signal. E.g. The market is in an uptrend, and price retraces to an area of support.

Here’re two guidelines for you:

1. Not more than four confluence factors

The more confluence you have, the higher the probability of your trade working out. But…

In the real world, your trading strategy should have anywhere between 2 – 4 confluence factors.

Anything more, chances are you’re going to get very little trading setups. And it’ll take you forever before your edge can play out.

You can take mediocre trading setups, and still make money in the long run.

2. Do not have more than one confluence factor in the same category

If you’re going to use indicators (oscillators) to identify overbought/oversold areas, then use that only.

Don’t add Stochastic, RSI and CCI because it’ll leave you with analysis paralysis. Similarly…

…adding simple, exponential and weighted moving average on your charts, doesn’t make any sense.

If you’re still reading at the point, you’re in for a treat. Because here comes the exciting part…

A high probability trading strategy that lets you profit in bull & bear markets

And here’s my secret (which is what you’ve just learned)…

  • Trade with the trend
  • Trade at areas of value
  • Find an entry
  • Set my stop loss
  • Plan my exit

If a trade meets these 5 criteria, then its a good trade to me.

Now, let’s learn a new trading strategy, that gives you high probability trading setups.

Are you ready?

Here it goes…

If 200ma is pointing higher and the price is above it, then it’s an uptrend (trading with the trend).

If it’s an uptrend, then wait for the price to pullback to an area of support (trading at an area of value).

If price pullback to an area of support, then wait for failure test entry (my entry trigger).

If there’s failure test entry, then go long on next candle’s open (my entry trigger).

If a trade is entered, then place a stop loss below the low of the candle, and take profit at nearest swing high (my exit and profit target).

Vice versa for a downtrend

**Disclaimer: I will not be responsible for any profit or loss resulting from using this trading strategy. Past performance is not an indication of future performance. Please do your own due diligence before risking your hard earned money.

Here’re a few trading examples…

High probability setup at (USB05YUSD):

High probability setup at (USD/SGD):

High probability setup at (GBP/AUD):

Here’s the thing:

You may not be comfortable using my trading strategy because it may not suit you.

So, what you need to do is, “tweak” it into something that fits you. And this is what we’ll cover next…

I don’t think traders can follow rules for very long unless they reflect their own trading style. – Ed Seykota

So, what’s next?

You’ve just learned how to identify high probability trading setups, and how to develop your own high probability trading strategy.

When you trade it with risk management, discipline, and consistency, you’ll greatly increase the odds of becoming a consistently profitable trader.

Best and Most Trusted Forex Brokers

Based on regulation, award recognition, mainstream credibility, and overwhelmingly positive client feedback, these six brokers stand out for their sterling reputations:

NoBrokerRegulationMin. DepositPlatformsAccount TypesOfferOpen New Account
1.RoboForexFSC Belize$10MT4, MT5, RTraderStandard, Cent, Zero SpreadWelcome Bonus $30Open RoboForex Account
2.AvaTradeASIC, FSCA$100MT4, MT5Standard, Cent, Zero SpreadTop Forex BrokerOpen AvaTrade Account
3.ExnessFCA, CySEC$1MT4, MT5Standard, Cent, Zero SpreadFree VPSOpen Exness Account
4.XMASIC, CySEC, FCA$5MT4, MT5Standard, Micro, Zero Spread20% Deposit BonusOpen XM Account
5.ICMarketsSeychelles FSA$200MT4, MT5, CTraderStandard, Zero SpreadBest Paypal BrokerOpen ICMarkets Account
6.XBTFXASIC, CySEC, FCA$10MT4, MT5Standard, Zero SpreadBest USA BrokerOpen XBTFX Account
7.VantageASIC, CySEC, FCA$50MT4, MT5Standard, Cent, Zero Spread20% Deposit BonusOpen Vantage Account
8.FXTMFSC Mauritius$10MT4, MT5Standard, Micro, Zero SpreadWelcome Bonus $50Open FXTM Account
9.FBSASIC, CySEC, FCA$5MT4, MT5Standard, Cent, Zero Spread100% Deposit BonusOpen FBS Account
10.BinanceDASP$10Binance PlatformsN/ABest Crypto BrokerOpen Binance Account
11.TradingViewUnregulatedFreeTradingViewN/ABest Trading PlatformOpen TradingView Account

“If you don't find a way to make money while you sleep, you will work until you die.”

- Warren Buffett

Added to wishlistRemoved from wishlist 14
Add to compare
Millionaire Gold Miner Pro EA trades automatically & earns stable profit every day. Most Profitable Robot for only $879.99.
Added to wishlistRemoved from wishlist 3
Add to compare
Golden Deer Holy Grail Indicator gives 2000 Pips per Trade with 99% Accurate Signal. Most Profitable MT4 Indicator for only $689.99
Added to wishlistRemoved from wishlist 17
Add to compare
FxCore100 EA is a very profitable scalper Expert advisor created by professional traders. It incorporates advanced strategies and analyzes multiple time frames and multi pairs. Order Now to get Special Discount.

Top Forex Brokers

Free Vps
Welcome Bonus 30 USD
Best Paypal Broker
Bonus 50 USD
Top Forex Broker
Best USA Broker
Best Crypto Broker
0 +
Successful Traders Making Profits with Our Robot & Indicator
$ 0
Average Profit Per Month with Our Robot & Indicator


Millionaire Gold Miner Pro EA

Number One Robot for Forex Trading.
Based on Price Action and Trend Analysis with Artificial Intelligence.
Works Best with EURUSD & XAUUSD.
You can use this EA on Multiple Accounts with Life Time Premium Support.
MyFXbook, FxBlue & Live Trading Verified.
Monthly Expected Profit is 20% to 200% with very Less Drawdown.

Added to wishlistRemoved from wishlist 14
Add to compare
Millionaire Gold Miner Pro EA trades automatically & earns stable profit every day. Most Profitable Robot for only $879.99.

check daily trading result

We will post our trading result daily on our channel. Please join our channel for daily updates.

Need Help?

Talk to our Experts. We're available 24/7.

Chat With Us
Follow us
Email to us
  1. It’s really a nice and useful piece of info. I am satisfied that you shared this
    helpful information with us. Please keep us up to date like this.
    Thanks for sharing.

  2. What’s up, this weekend is nice for me, as this moment i
    am reading this fantastic informative piece of writing
    here at my residence.

  3. Having read this I thought it was really enlightening.
    I appreciate you finding the time and energy
    to put this content together. I once again find myself spending a significant amount of time both reading and commenting.
    But so what, it was still worthwhile!

  4. It is perfect time to make some plans for the future and it’s time to be happy.
    I’ve read this post and if I could I desire to suggest you some
    interesting things or tips. Perhaps you can write next articles referring
    to this article. I wish to read even more things about it!

    • Thanks for sharing this information about. You can get high-quality diagnostic services from Gdax diagnostic lab. I was searching for this type of information for the last week but now I found the best info by posting your blog.

  5. I am really happy after reading your post, this blog is very interesting and thanks for sharing this nice post. You can also read my blog to get more healthy tips.

Leave a reply

Automate Your Trading with Forex Robot, Forex EA & Indicator.
Compare items
  • Total (0)
Shopping cart