Point system to destinguish high or low probability trades?

Hey guys,

I wanted to ask if you guys ever used a point system in your trading to distinguish lower probability trades from higher probability ones?

With a point system i mean something like this:
Trade 1
Lets say you have a chart and it just closed on a double top.
That double top could be a certain amount of points lets say 1 for the hell of it.
Once you see that you start looking at other indicators like RSI and structure.
RSI is overbought meaning you add 1 more point.
Then it lines up with some structure which adds 1 more point.
That's a trade worth of 3 points.

Trade 2
Now you have a similar trade opportunity but the RSI is not overbought and there is no structure to support it.
That trade would be worth 1 point.

If you put the 2 trades against each other Trade 1 would have a higher chance of success than Trade 2.

So have you guys ever used a system like this? If so want to elaborate on it? Give any examples?
If you have never used a point system what have you used or do you just wing it?


Thank you
AntiVi

It's a good start. I don't use a "point" system per-se but I consider altogether about 15 variables for each trade that I take. Not all are relevant for every trade, and they don't usually point to the same direction. But I resolve them using my own understanding of how the market works.

Read this for a similar perspective:

http://www.eminiplayer.com/2009/06/l...ul-trader.html

A question to think about:

- Not all filters/criteria are made equal. How do you go about finding out which ones actually work in the market and which ones don't?

So you don't use a point system but you do have a scoring system in your head even if it doesn't use numbers. Your market knowledge and the knowledge of your ways allows you to distinguish good trades from bad ones.

I read the article and long story short what I got from that article is that this particular person studied the markets and observed them to be able to predict it and feel where it's going. Which got him see "setups" form for him in a way.
What he's also saying is that without being able to truly read the markets those setups and indicators are not going to help in any way.

That is what I got from it.
Now I may be wrong and I may have to re-read it but that's as far as I got with understanding it.


Thanks for the information!
AntiVi

Trading is probably about probabilities. You probably want to find something in your historical charts that works 55% of the time. If you find something, bet on that. Again and again. Then you make money. Don't forget; the only way to make a million in Forex is to lose 9 million and to make 10 million.