The theme of High Probability Trade Strategies is to learn to identify conditions with a high probability outcome with acceptable capital exposure. It should be the theme of any trading plan whether or not you use the specific strategies taught in my book.
To win in the business of trading just like in any other business, you must have an edge. That edge is specific trade strategies to recognize when a market is in a position to complete a correction or a trend so you can enter a trade in the very early stages of the new trend and sell in the very late stages.
Just as a farmer must know the optimal time to plant and harvest a crop, the trader must know the optimal time to buy and sell a position. Buying or selling too early or too late at worst can result in unacceptable losses, or at best, not maximize the return from a position. The trader must clearly understand the relevant information about the market position to recognize the optimal conditions to buy or sell.
Every trade will not be profitable which is why we only consider a trade with a high probability outcome and acceptable capital exposure. That means part of the trading edge includes specific trade strategies that only consider trades with relatively small capital exposure (risk) and pass up any trade setup, no matter how good it looks, if the capital exposure is more than allowed by the trading plan.
I can’t tell you how many times a market has got to a position that appeared to be an incredible trade setup, meaning a very probable outcome, but the capital exposure to take the trade was more than acceptable by my trade plan and I had to pass up the trade. Since my entry strategies and those taught in the book are 100% objective once the conditions are in place to consider a trade, I can determine the exact risk (capital exposure) and position size for any potential trade before the trade is taken. The upside is, there is almost always an acceptable second chance.
The consistently successful trader will only consider trades with a high probability outcome and acceptable capital exposure. The consistently successful trader will have no problem passing up a trade that does not meet this objective.