How to Quickly Spot a Winning Trade - Investing Shortcuts

How to Quickly Spot a Winning Trade

By June 27, 2016Trading
How to Quickly Spot a Winning Trade

Although not every trade is going to be a winner, there are ways to quickly spot those “winning trades” which can greatly improve your probabilities. There are many ways to spot winning trades but the best way to spot a winning trade is to do it with simple day trading rules; the easier the rules and trade set-up, the quicker you can react and place that trade. How does that old saying go? Ah, I know: “He who hesitates is lost.”

I can quickly spot higher probability winning trades using support and resistance, order flow (volume), and the RSI indicator. I use a 15-minute chart with my Oil Trading Group (OTG) Support and Resistance Tool, the RSI Indicator set to 14 and 3, and a 5-minute chart with the ORG Support and Resistance Tool for pinpoint, surgical entries, and stop placement.

The OTG Support and Resistance Tool provides me with key price levels where price may either hold and deflect from that level or it could break through; if price holds I will set up for a fade trade and if it breaks through I will possibly set up for a breakout trade. I prefer to use a 15-minute chart because I feel that a timeframe this size provides better information regarding the entry and indicator behavior, as well as being the timeframe that seems to work best for my final quick decision-making point/tool: RSI. This really is an easy setup and it’s quick to spot a winning trade because I’m only looking at three things as opposed to trying to monitor numerous timeframes, indicators, and even other markets that may correlate with the oil market.

The trade setup is really very simple (for this example we’ll use a fade trade): First you’ll want to look for an area/price level of strong support and resistance. Second, when the RSI shows overbought or oversold at that level, you’ll want to place your buy or sell limit order accordingly. Third, and perhaps this should have really been first: Do this on a 15-minute chart as I mentioned earlier. Check out the screenshot below to see just how quick and easy to spot this winning trade I am referring to.


For the fade trade in this case, to quickly spot the winning, higher probability trade is easy. Use the 15-minute chart and wait for price to come to a significant support and resistance/price level. Next, you’ll want to see if the RSI Indicator in either an overbought or oversold range. Finally, all you’ll have to do is set your entry, place your stop, and set a logical target for your exit. Does this trade win 100% of the time? Of course not, but it is a high probability trade setup and it’s quick and easy to spot.

Can we quickly spot a “winning trade?” Sure we can, but in this case, I feel it’s better and more realistic to say that what we are really doing is quickly spotting higher probability trades. We’ll never win every trade, but we can execute on high probabilities, and yes, of course, we want them to be winners! Even though we won’t win every time, we quickly want to at least be able to spot and execute our trades in a timely fashion and have a solid entry, stop, and exit strategy in place. I use a simple strategy here at the Oil Trading Group because I know that the longer it takes to decide to take a trade the further and further opportunity will move away from me. Simplicity is always best in my humble opinion and I feel it serves me well; it could serve you well too.

Jason Love

Author Jason Love

Lead trader of the Oil Trading Group, Jason Love has been an active day trader for the past ten years. The Oil Trading Group was founded over five years ago to address the glaring need for quality day trading education. Prior to becoming a day trader, Jason ran a 300-seat call center, as the Vice President of Operations. As a veteran of the United States Navy, who served during Operation Desert Storm, Jason understands the value that structure and discipline have in day trading the volatile financial markets. In addition to providing day trading education to customers, he is also providing education services to a large futures trading firm, based in Chicago. When Jason is not trading, he is coaching his son’s Travel Select Youth baseball team and spending quality time with his family.

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