7 High Profiting Trading Strategies You Can Start With

Table of Contents

1. Introduction to High Profit Trading
2. Defining High Profit Trading
3. Key Factors for Trading Success
4. Scalping - Strategy #1
5. Range Trading - Strategy #2
6. Momentum Trading - Strategy #3
7. News-Based Trading - Strategy #4
8. High Frequency Trading - Strategy #5
9. Pattern Trading - Strategy #6
10. Swing Trading - Strategy #7
11. Managing Risk and Money
12. Achieving Consistency
13. Getting Started with Demo Trading
14. Key Takeaways

Introduction to High Profit Trading

Trading presents substantial risks but also opportunities for consistent above-average returns. This makes it appealing for beginners eager to profit beyond basic investing. High profit trading strategies aim to maximize gains using proven frameworks tailored to your strengths.

This introduction covers trading foundations plus an overview of these 7 high profit potential blueprints. We define key elements separating trading from investing plus factors contributing to success. These foundations set the stage for applying any specified methods advantageously based on historical performance tendancies.

Whether supplementing income or aspiring to trade for a living, having accurate expectations helps facilitate smooth growth as a trader. Now let's examine how these strategic systems can deliver elevated returns managed prudently over long time horizons.

Defining High Profit Trading

High profit trading refers to rule-based methods engineered to capture trades offering asymmetric risk vs. reward. Through technical analysis and indicators, trades feature predefined entry/exit levels with upside profit potential exceeding downside loss risk.

These traders patiently target large returns on trades likely to win while cutting losses quick when high probability setups fail to materialize. This contrasts with styles prioritizing high win percentages or extremely infrequent large payouts on one-off lucky wins. High profit trading requires resilience to withstand strings of stopped out losses between successfully closed positions. Trading small while adhering strictly to stop loss orders protects capital during inevitable losing streaks.

Key Factors for Trading Success

Achieving consistent success trading high probability systems relies on developing certain core competencies:

• Time commitment - Conduct extensive historical research and refine strategies by backtesting performance through various market conditions. This data reveals optimal asset selections and technical blueprint configurations.
• Essential tools - Charting platforms, news feeds, and direct market data feeds help recognize technical signals in real-time across markets. Level 2 order book visibility facilitates order execution and scalping strategies.
• Trading psychology - Cultivate patience and discipline to follow predefined trade plans through good periods and bad. Resist overtrading and revenge trading which sabotage returns long-term.

Mastering these core trading tenets increases statistical chances of executing high profit systems skillfully. Misapplying even the best methodologies leads to failure. We will reference these principles when examining specific trading strategy examples.

Trading Strategy #1: Scalping

Scalping trading strategies aim to compound many micro intraday gains by opening and closing positions rapidly. Leveraging ultra short-term minor price swings produces returns through high volume small wins outpacing fewer but larger losses.

These traders utilize direct market access for split-second order execution speed. Such precision becomes possible only when layered upon robust risk management given the accelerated pace of trading. By scaling positions safely and cutting losses quickly, gains accrue over time.

Let’s examine two common scalping approaches more closely:

Tick Chart Scalping

Tick charts track every single trade transaction rather than standard time intervals. This reveals the sequencing of buyers and sellers entering the market on an exceptionally granular basis. Traders can gauge pressure shifts identify order imbalances. Entering before the herd capitalizes on likely short-term price movements as transactions cluster directionally.

1. Gauge buying and selling pressure solely using tick chart indicators like cumulative tick.
2. Identify distinct support and resistance levels where transactions start stacking opposite direction signalling pressure shifts.
3. Enter trades only in direction of pressure momentum - long trades off support with buying pressure or vice versa at resistance.
4. Set tight stop losses of only 1-3 ticks exposing you quickly if wrong.
5. Take fast profits when transactions slow, shifting pressure stalls momentum.

Repeating the process hundreds of times daily leverages favorable risk-reward trading opportunities over the full day session.

Volume Profile Scalping

Volume profile maps transaction activity visually showing the price levels attracting high participation. Areas with heaviest trading interest often function as short term support and resistance ranges. By entering limit orders to sell highs or buy lows into these high volume zones you improve odds of getting filled desirably.

Strategies using volume profile analysis for scalping attempt to achieve many micro profits between regions of low participation where risk increases. In slower zones use wider stops up to levels showing spikes in historical volume. Open positions aiming to capture even 5-10 ticks profit prior to entering next evident volume shelf area.

Both tick chart and volume profile analyses cater well to scalping methods relying on ultra short-term low risk entries timed properly as herd buying or selling enters observable areas that benefit a reversal back against their positioning.

Trading Strategy #2: Range Trading

Range trading involves strategically buying at low end support while selling into high end resistance when prices oscillate between well-defined technical boundaries. Ranges form as markets digest previous momentum moves pausing in consolidation.

Disciplined range traders sell assets pushing into overbought territory near identifiable resistance expecting buying pressure to evaporate leading to rotation lower. They aim to repurchase those same assets at predefined support levels where selling pressureExpect selling pressure to dissipate soon driving prices higher once again toward range resistance. This buying low while selling high creates reliable returns.

Master range trading through the following steps:

1. Scan charts for ranging price action on desired timeframes. Estimate support and resistance levels based on repeating price peaks and valleys. Apply indicators like Bollinger Bands to improve decision accuracy. Consider historical volatility particular to the chosen asset when projecting realistic range widths likely to contain future oscillations.

2. Refine range estimates and entry targets. Initially trade smaller position sizes to gauge range accuracy as markets evolve. Certain assets and sectors range more cleanly than others so track performance data accordingly. Update levels as necessary based on updated price action.

3. Scale positions safely as prices cycle within range. Buy more shares or contracts as prices drop to support with disciplined sell limit orders placed at resistance. Accumulate swing position scale-ins during shifts from peak to trough. Take profits closing portions on touches of price extremes heading opposite direction.

When properly executed, range trading strategies promote consistency holding through consolidation while assets build energy for eventual breakouts. Trade smaller awaiting such breakouts with tighter stops. Efficient risk management ensures resilience over hundreds of oscillations favoring strategy success.

Trading Strategy #3: Momentum Trading

Momentum traders aim to isolate accelerating price runs to profit from directional breakouts and trending markets. Buyers and sellers urgent activity generates rapid rallies and selloffs ultimately reversing from overbought and oversold conditions.

Spotting these high conviction moves early allows participating in large price swings. Momentum suggests trade continuation rather than mean reversion making it easier riding gains. Clean trends keep running on their own momentum until peaking unsustainably.

The two most common momentum frameworks involve breakout theory and trend following.

Breakout Trading

Breakout trading springs from the idea that prices forced above past resistant levels or conversely under longstanding support brings fresh urgency causing rapid advances. This strategy purchases assets surging to new highs or sells bearishly into plunging lows aiming to continuation.

1. Identify key price levels either using round numbers like $50 or $100 or by establishing technical resistance levels on charts where advances repetitively encounter selling.
2. Place buy stop orders just above resistance so that bids activate only on trade bursts surging upward through levels expected to trigger further buying enthusiasm.
3. Use protective sell stop orders below recent price lows to limit losses if breakouts collapse back below activated entry triggers.
4. Book profits during overextensions at measured technical targets or trailing stops to lock gains if trends show signs of fading while managing overall trade exposure.

Repeat breakout strategy process constantly monitoring for assets approaching key thresholds implying likelihood of strong directional convictions if breached with volume.

Trend Following

Trend following aims to participate in directional swings already underway having built momentum. This lagging strategy purchases market dips within established uptrends or sells bearish rallies once downward slide confirms. Assume existing trends more likely continue moving forward until signs of exhaustion present.

1. Utilize moving averages to clarify overall market bias dividing assets into upwards trending or declining categorizations.
2. Enter trades only in direction of prevailing trends with buy limit orders to pick up pullback dips within rising trends. Alternately short sell weak bounces dropping inside falling channel trends.
3. Employ multiple layered moving averages like 20/50/200 on daily charts to define trajectories. Assess bullish or bearish alignment of averages to estimate strength.
4. Sell portions of portfolio if averages cross bearishly, transitioning from sloping upward to downward slide. Alternately buy heavy when faster moving averages crossover pushing above downward pointing slower averages hinting positive momentum building.

Both breakout and trend following systems enable participating in accelerating price runs driven by impulsive herd buying or panic selling. Trading in direction of momentum improves odds substantially compared to mean reversion or contrarian methods anticipating whipsaws.

Trading Strategy #4: News-Based Trading

News trading aims to profit from increased volatility surrounding scheduled events like economic data releases, corporate earnings reports, central bank decisions, elections, etc. These known catalysts move markets when announced based on prediction versus actual numbers.

By familiarizing with past reactions to major announcements and estimating forecasted numbers compared to expectations provides an advantage. Well prepared traders position ahead based on intelligence predicting how prices likely swing when future updated data hits the tape.

For illustration we will use nonfarm payroll reports as an example of impactful event-driven volatility:

Nonfarm Payrolls Trading Strategy

1. Check economic calendar for next monthly jobs report release date and record Bloomberg-surveyed economist estimates for jobs added plus unemployment rate.
2. Review price historical reactions in related assets like E-mini S&P 500 futures contract or currency pairs around previous data. Did prices rise or sell off sharply? Are big deviations from expectations required to spark larger reactions?
3. Enter positions ahead of report based on forecast models and your predictions on numbers. For example if economists project only 150,000 jobs added but recent data looked strong, speculate on an upside surprise. Buy E-mini S&P futures or dollar index call options priced attractively while market still uncertain on results.
4. Upon data release observe initial volatility explode higher or lower based on actual print. Were your projections accurate? If report aligns with your pre-report bias allowing sharp price swings favoring your positioning then hold trades targeting bigger technical levels as trend forms. If wrong, close out losing trades quickly.

Rinse and repeat the research process for subsequent economic releases. Over time you will discover which pieces of news truly ramp volatility across various assets when announced. Establish rules around positioning strategies before these catalysts hit based on probability.

Trading Strategy #5: High Frequency Trading

High frequency trading (HFT) systems utilize complex algorithms analyzing data and news to automate order placement measured in microseconds. Trades often open and close positions within seconds attempting to capture many minor price discrepancies between liquidity pools.

These algorithms rely on advanced quantitative models determining extremely short term opportunities too fast for human comprehension. Trades last milliseconds to seconds before flipping positioning repeatedly all session long. Consistent marginal gains extracted thousands of times daily compounded can elevate formidable returns over time while diversifying intraday risk.

The downside to HFT involves immense computing infrastructure, low latency networks, and expert programmers needed developing algorithms costing substantial capital. Individual traders realistically cannot compete using standard software and internet connections unable to react as quickly processing market data.

But for institutional players like hedge funds who possess resources for co-locating servers inside buildings adjoining exchanges, high frequency trading presents reliable income collecting tiny spreads. Just ensure rigorous risk controls and fat tail protections since unexpected flash crashes cause violent drawdowns devastating poorly coded algorithms. When functioning properly though, machines dominate exploiting micro patterns human abilities prevent capitalizing on.

Trading Strategy #6: Pattern Trading

Pattern trading attempts predicting future price trends analyzing historical chart formations and technical analysis indicators. By identifying repeating candlestick formations and high probability event sequences granting advanced notice to developing moves allows strategically positioning ahead to profit.

For example, a head and shoulders topping pattern emerging on a stock in a strong uptrend provides early alert for potential bullish exhaustion often followed by meaningful declines. Pattern traders sell short positioning for swing trades after neckline support gives way expecting selling acceleration follow through. The trigger forms the trade entry with initial stop above structure high. Profit target based on pattern measured move projecting extent of downside.

Pre-identified chart patterns improve odds substantially compared to arbitrarily buying strength or shorting weakness. History shows assets trending certain ways when specific price action forms likely continue moving similarly like collective trader self-fulfilling prophecies.

Profitable implementation requires patience mastering high probability formations for favorite markets. Maintain databases cataloging reliable reoccurring setups. Reference for strategy planning when next clean examples take shape. Remember, even 70% probability patterns still lose 30% of time. Define risk parameters for all trades based on historical accuracy rates for each distinctive formation. Pattern trading fits the modeling of high profit trading well capturing occasional outsized winners exceeding smaller losers over time.

Trading Strategy #7: Swing Trading

Swing trading involves holding multi-day positions attempting to profit from intermediate price rotations exceeding normal volatility ranges. These trades capture larger moves holding from days to weeks spanning further than ultra short-term scalpers or high frequency traders might participate.

Swing traders rely on technical analysis to estimate entry and exit levels for trades expected to rotate favorably compared to recent price swings as anchored from key chart levels. Trades often involve scaling into pullbacks within existing trends or trading ranges until momentum shifts cause a breach through support or resistance expected to propel prices considerably further.

A great aspect of swing trading comes from fitting various personality types and lifestyles. You need not observe charts continuously through days as with day trading. Extended holds with wide technical stops and profit targets allows flexibility monitoring positions only periodically.

Just ensure employing initial protective sell stops on all trades plus trailing stops to lock gains in case larger trends reverse. Disciplined sell rules critical managing exits since swing trade holding periods extend beyond short term volatility seeing prices rotate more dynamically over trades lasting days or weeks rather than minutes or hours like scalping and high frequency approaches.

Managing Risk and Money

Robust risk and money management represent the foundation for reliably generating high profit returns trading any style. Without appropriate safeguards preserving capital and restricting overexposure, even the best researched plans crumble losing effectiveness extracting gains long run.

Preserve Capital

Limit total risk on any one trade to a maximum 1% of current account value based on placement of stop loss order. This protects your trading business from wipeouts ensuring you live to play another day if wrong. Never risk so much that you cannot absorb a string of stopped out losers and still continue trading. Surviving bad patches keeps you in the game for when probabilities normalize benefiting prepared strategy execution.

Avoid Overexposure

Scale into larger positions slowly as favorable trades gain positive traction. Don’t invest randomly big upfront without evidence of movement supporting your thesis. Fully risking into trades too quickly leads to overexposure diminishing flexibility responding to shifting conditions across multiple positions during open market exposure. There will always exist opportunities tomorrow and the next day if preserving cash today.

Reinvestment Strategy

Withdrawing consistent percentages of gains as performance milestone markers reached retains compounding capital reserves protecting from downward shocks while allowing profits accumulation promoting growth. Consider withdrawn excess as your actual realized business income rather than paper financial statements. Adhere to fixed mathematical systems religiously dictating paydays. Never compromise predetermined reinvestment rules no matter current circumstances.

Performance Benchmarking

Compare trading results against reasonable benchmarks divided across proper intervals measuring both short and long term epoch performance. Do you execute well during volatile trending markets but underperform slow choppy conditions? Breakdown statistical portfolio performance based on rational groupings relevant to strategy goals. Measure both income consistency and risk-adjusted returns smoothness over long haul. Benchmark relative performance often to guide improvement areas through weakness and struggle periods experienced invariably by all traders.

Following these guidelines shields trading funds from potential disastrous losses and irrational emotional decisions sabotaging system efficacy. Never underestimate money management significance.

Achieving Consistency

All traders inevitably experience strings of losses between fruitful winning periods. Maintaining consistency through diverse BUSINESS CYCLE involves accepting harsh truths about trading realities before profits come consistently.

Here are key lessons to deeply embrace:

Losses Accrue Looming Before Major Winners

Across all strategies, perfect technical patterns and schemes break wrongly before amazing setups eventually materialize delivering outsized opportunity years past initial screen time endured painfully. Assume growing pains and failure periods part parcel before discovering true edge fitting abilities. Persevere.

Opposing Conditions Unearth Hidden Weaknesses

Strong trending markets may generate income deception masking poor habit patterns. Until challenged by diverse conditions like rangebound chop exposing flaws, you may falsely assume capability stronger than truth reality. View raw performance metrics through lens of variance between behaviors in contrasting cycle types. Do not become overconfident without experiencing diverse environments inevitably exposing holes.

Automate Rules Maximizing Impartiality

Program rules for entries, exits and trade size proportional to volatility measures or other external variables maintaining consistent impartial guidelines. Humans falter tweaking plans favoring current bias losing neutrality. Automated systems significantly outperform discretionary methods over multi-year durations. Let formulas dictate actions applying strategy through all kinds of markets rising and falling because math cares not about fear or greed.

Design Sleep Well Compositions

Engineer portfolio asset allocations across differentiated holdings balancing upside profit potential and downside risks hedging various cycle conditions. Blend models incorporating fixed percentage devotion toward multiple favorable reward profile trades both high probability and high reward overlaying realized volatility. When constituents viewed as entire basket rather than individually, consistently favorable expected value achievable over years compounding gains repeating managed strategy hundreds of times through bull bear extremes equally well constructed sleeping overnight peacefully.

Accepting these realities helps overcome inevitable adversity facing active traders. Stay devoted improving without emotional decisions even facing pain. Consistency builds over long run remaining persistent.

Getting Started with Demo Trading

Implementing high probability systems requires trusting strategy performance metrics quantified through reprisal application trading live markets. Paper trading historically observed market data inaccurately represents real-time trading realities involving fear, greed and slippage. Therefore best way familiarizing with new methods comes trading small utilizing demo accounts.

Demo Trading Benefits

• Test theories and skill in live market environments as prices fluctuate reactively reflecting global participant inputs rather than past frozen ticks.
• Duplicate emoitonal realities making hurried decisions facing financial risks providing invaluable experience before committing significant capital.
• Gauge execution system proficiency in volatile news reactions. Confirm capability responding instantly when opportunities emerge.
• Gain repetition developing rhythm and intuitive feel applying analytics frameworks and indicator analyses determining trade decisions in real-time.

Demo Implementation Approach

1. Open demo account enjoying identical features as live brokerage platform - full functionality mirrors reality.
2. Fund with imaginary balance exceeding minimum required for intended trades - $25,000 or more.
3. Execute trades exactly as live performance strategy dictates - test ability following rules in real time vs just theoretical historical backtests.
4. Hold positions minutes to hours to simulate real holding periods for intraday scalping, momentum breakouts, etc. Trend trade beyond single days.
5. Maintain written journal tracking every trade detailing decisions, endings and learnings - build reference driving future improvements.
6. Repeat process until consistent gains generated signaling preparedness upgrading with real capital applying strategy closely monitored.

Demo trading teaches the principles and skills integral to growth journey toward independent full-time trading. Respect challenges encountered equally as live performance accountability. Soon profits come as experience accrues over time.

Achieving Independent Trader Status

The path toward trading mastery travels through tiered developmental stages distinguishing capabilities scaling profitably over multiyear journey. Skills compound as understanding deepens through education, screen time and proven performance milestones reached meeting minimum benchmarks.

Here we highlight the trader tiers classifying various proficiency levels based on milestone metrics:

Tier 1 - Novice

• Lacks market awareness and education regarding impact of global macroeconomics, sector rotations, behavioral psychology and technical factors driving prices.
• Possesses under $20,000 account balance.
• Rarely generates reliable monthly profit averaging less than 20% annual returns.
• Learning basics still through books, online courses and chat rooms.

Tier 2 - Intermediate

• Knowledgable understanding core price influences across diverse asset classes.
• Actively trading account balance between $20,000 and $100,000.
• Generates acceptable income lacking consistency between positive months averaging 25-40% annually long term.
• Comfortable with company models, chart patterns, indicator strategies but still developing true edge.

Tier 3 - Advanced

• Deep macro perspective across global market linkages between equities, currencies, commodities and crypto assets.
• Commands minimum $100,000+ portfolio with disciplined position scaling formulas personalized fitting strategy.
• Earns consistent stable income averaging 45-100%+ annual returns including losses through multitude cycles.
• Designs and implements automated algorithmic systems or profitable technical models possessing definable edges studied analytically.

Tier 4 – Professional

• Global multi-asset mastery leveraging interconnected macroeconomic themes, fiscal policies, geopolitics, sector fundamentals, commodity supercycles, chart patterns, indicator strategies and automated trading algorithms.
• Manages multiple 7 to 8 figure trading fund allocations scaling strategies enormous capacity without influences.
• Generates reliable monthly income compounding annually exceeding minimum 40-80% returns over decades through bull and bear market cycles consistently.
• Recognized independent floor trader, individual hedge fund operator or lead portfolio manager for major financial institutions making daily decisions for substantial capital allocations.

This trader tier model provides aspirational milestones guiding skill level growth pathway. Obviously achieving top tier professional consistency demands extensive screen time and performance metrics tracked over years developing abilities handling 6 to 7 figure allocations.

Stay hungry, always learning through self-education, historical backtests, training instinct and demo trading preparing for prime opportunities destined to emerge. Keep climbing tiers, expanding knowledge and transforming into dangerous traders exploiting assets when the time comes ready delivering outsized performance. Now you see the path - walk it!

Key Takeaways and Next Steps

We have surveyed numerous high profit trading strategies viable to beginners for generating elevated returns compared to basic investing approaches. Finding methodology aligning closest to your strengths and risk tolerance makes further development easier.

The key becomes sticking to proven frameworks optimizing every decision on entries, hold periods and exits to match your top performing historically backtested methodology. Never stop researching and anticipating improving through forward walk forward testing over hundreds of trades across varied market environments.

Build screen time and execution experience identifying best asset selections and technical blueprint configurations producing the highest consistency meeting your trade style and life preferences. Find optimal time frames delivering enough quality setups to run favorably often enough without diluting selectivity overtrading or forcing marginal trades.

Blend complementary short term and longer term swing approaches balancing portfolio exposures to drive returns across multiple positions of varied holding length. Maintain disciplined adherence to predetermined methodology rules dictating all actions minimizing individual emotional inputs destroying profitability.

Now you have blueprints detailing real methods profitable traders implement daily extracting excellent risk-reward scenarios compounding gains steadily thanks to built-in mathematical advantages inherent to these high profit centric trading strategies.

Keep developing greater expertise around the frameworks resonating closest to you based on historical backtests. Soon you will gain confidence risking more capital as skills improve execution. Stick with proven high probability systems avoiding temptation to overcomplicate what works.

Before long you also may rank among the growing world-class tier of independent traders relying on combinations of these competing alpha generation styles to achieve your dream income compounding higher highs and higher lows repetitively to the top!

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