Street Smarts – The High Probability Trade

 

Mark McRae is a well known trader. Recently at a global trading convention we had the opportunity to quiz him all the tricky questions no one else dared explore. One important nugget of information revealed to us was regarding some unique patterns he has discovered for successful trading. Read on to find out the insider secrets on trading patterns indicators to reveal high probability trades.

Mark explained that he has some unique patterns for trading. He can’t certain whether he is the only one who knows them but has not seen them around. The patterns include some setups that he has sort of formulated over the years, such as reversal bars and now they’re very popular. They’re called lots of different things: pin bars, reversal bars. It is interesting to see the way certain formations happen and how they line up correctly. Mark however, has about ten or fifteen particular patterns that he likes to see, which over the years have a very high probability.

So when he sees those patterns (usually round about support or resistance), where supply and demand is, or a trend line, or even major highs and lows then you can line up a lot of data at a detailed level to get some patterns emerging.

Now if you’ve got three or four different things at that level, then you can miss the formation that you’re looking for, that’s a high probability trade, on either side. That doesn’t mean that you’re always right, but the probability is that when all those things line up together, that makes a much higher probability trade, and they don’t line up that often. This is why it is not practical always to trade every single deal.

So does this system work in all markets?

Mark says it works in any market in any time frame because it can’t not work. In other words, if it is price driven, every market has a price and there’s up and down. It finds levels where it finds resistance and support, so it would work in all markets. And every market is — a lot of what works in all markets — every market has its own personality.

If you know the stock market, then you would agree the expert in the stock market has a different personality from Forex. Although they’re very similar, and even the type of traders, a stock trader is a slightly different animal from a Forex trader, who is a slightly different animal maybe from an options trader. The personalities are slightly different. Maybe that’s why you feel comfortable in a certain market. Hence Mark feels his comfort zone is in the forex market identifying high probability trades.

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