High probability trading
Wednesday, November 1 2000
Risk vs. reward is the defining element of a winning trading methodology. Use the probability band to define your likely reward in combination with high probability trading strategies for optimum results.
Every trader is different each has his own risk tolerance, trading ability and analytical skills.
Knowing who and what kind of trader you are is key to determining what type of indicators or trading systems you will be comfortable using. For example, many people hate to lose. But because losing is an inevitable part of the game, this is one of the worst characteristics a trader can possess. Although you cannot completely escape losses in trading, the Berman probability band, used in conjunction with some high probability trading strategies can help minimize the number of losing trades you may make.
After thoroughly testing nearly every kind of oscillator and indicator available, we have discovered that most work very well about 50% of the time, some even less than that. We also noted that there are just two or three really big trades per year where a trader makes all of his money. However, the problem we encountered was that no matter which indicator was used, there was no notable signal that preceded these big moves - at least not enough to be statistically significant.
