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E-Mini Scalpers, Probability, and Why Great Set-Ups Fail

We all have our favorite “go to” set-up and when that set-up presents itself I sometimes start counting my chickens before they hatch. Generally, after taking what I believe to be the perfect entry and watching it nose-dive the wrong way I start mumbling to myself, “that trade always wins, what’s up with it losing?” It is important to understand that even the best trade has the potential to fail miserably. It’s part of the trading dance to lose trades. Trading is a function of probability and even the highest percentage trades, if you track your trades, will fail.

There are several very high probability e-mini scalps that I use to initiate trades. Some of these trades have winning percentages that exceed 70%. In my opinion, initiating a trade set-up that has profited 70% in the past is a no-brainer. A trade with high probability will generally work out in your favor, except when it doesn’t. Most people forget that a trade that wins 70% of the time, doesn’t win 30% of the time. It should not be shocking when your “go to” trade occasionally does not work out the way you planned. What causes a high probability trade to fail? There are many factors that cause a high probability trade to fail, some of which are:

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