A typical trading trap is getting lost in the foliage.
You're only seeing the trees and missing the forest. All that clutter blinds you to the enormous opportunity right in front of you—the trade that makes your month or even your quarter. Let's fix that…
Now, picture Warren Buffet as an intraday trader.
Two crucial need-to-know facts about Buffet are:
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He doesn't bet uniformly.
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He's always ready to go big on asymmetric setups.
Asymmetric setups: where the reward is massively skewed in your favour, and the trade not working is unlikely.
Now, imagine Buffett trading in just one market—the same one I trade.
Given his principle of asymmetric setups, he’d choose this market for a critical feature: a built-in price floor.
Let me explain.
Without going into the fundamentals, at times, price becomes unhinged from reality.
In the 'near term,' the odds of the market going below the current floor are so low that it produces a trade so massively skewed to winning versus losing, savvy traders jump at it, going all-in to use a poker analogy.
From Monday
Above you see trading begins with short-term scalping—winning and losing equally.
Finally, the market trades at a level triggering the asymmetric long opportunity.
From Wednesday
Due to the EOM theme, the opportunity was greater.
Caveat
This is an advanced strategy requiring multiple points of evidence. Without all of the necessary variables trades which look similar on a chart will punish you relentlessly.
In summary
A market offering a built-in price floor and non-uniform betting is a powerful combination to achieve outsized payouts.
Not to be confused with 'bottom picking', these trades are only taken when the necessary multiple points of evidence are present.
Forex and derivatives trading is a highly competitive and often extremely fast-paced environment. It only rewards individuals who attain the required level of skill and expertise to compete. Past performance is not indicative of future results. There is a substantial risk of loss to unskilled and inexperienced players. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent
Editors’ Picks
EUR/USD rises to near 1.1700 due to Trump’s tariff threats on European Union
EUR/USD halts its three-day losing streak, trading around 1.1700 during the Asian hours on Monday. The pair gains ground as the US Dollar loses ground due to escalating global trade tensions. On Saturday, US President Donald Trump announced a 30% tariff on imports from the European Union and Mexico starting August 1.
GBP/USD holds steady around 1.3500; seems vulnerable near multi-week low
The GBP/USD pair enters a bearish consolidation phase during the Asian session and oscillates in a narrow band around the 1.3500 psychological mark, just a few pips above a three-week low touched on Friday. Moreover, the fundamental backdrop suggests that the path of least resistance for spot prices remains to the downside.
USD/JPY eases from multi-week highs near 147.60
USD/JPY retreats from a three-week high of 147.57 touched earlier this Monday amid worries that US President Donald Trump's trade tariffs would complicate the Bank of Japan's path to policy normalization. The domestic political uncertainty ahead of the July 20 upper house election could undermine the Japanese Yen, cushioning the pair's downside.
Editors’ Picks
Bitcoin rallies closer to $120,000 milestone, setting a new high
Bitcoin breaks above the key milestone level on Friday, setting a new all-time high of $119,999, with no signs of slowing. The technical outlook supports further gains as momentum indicators remain robust and price action firmly in price discovery mode, with the next potential target above $130,000.
AUD/USD stays pressured toward 0.6550 after Chinese Trade Balance data
AUD/USD holds losses toward 0.6550 in the Asian session on Monday. The higher-yielding Australian Dollar weakens after US President Donald Trump steps up fresh tariff threats, undermining risk sentiment. The pair fails to find any inspiration from the mixed Chinese Trade Balance data as the US Dollar rebounds.
Gold price retains its positive bias amid a broadly weaker USD; lacks bullish conviction
Gold price trades with a mild positive for the second straight day on Thursday, though it lacks follow-through and remains below the $3,350 level through the early European session. Reports that US President Donald Trump was considering replacing Federal Reserve Chair Jerome Powell raised concerns over the future independence of the US central bank.
Bitcoin Cash targets 52-week high as on-chain data indicate room for growth
Bitcoin Cash (BCH) is trading in the green by 2% at press time on Thursday, following a 6.39% price surge on Wednesday. Rising in a parallel channel pattern, BCH shows signs of increasing bullish momentum and nearing the $500 psychological level.
Could Iran block the Strait of Hormuz? Why Oil is on edge after US strikes
As the Israel-Iran conflict reaches new heights, an old threat is coming back to haunt the markets: that of the closure of the Strait of Hormuz. This narrow arm of the sea in the Persian Gulf, wedged between Iran to the north and the United Arab Emirates and Oman to the south, is much more than a simple sea passage.
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