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I know that after market opening 80% of the time the price at least gets a minor reversal and 20% of the time, the price moves with a strong trend without any reversal. Then if I see a market opens with a strong trend in a few bars, how can I trade? For example, if I see a strong opening and all the 3 bars after opening are large trend bars, should I buy or sell at market price? If I do open the position, 80% of the chance I will get a reversal but if I don't open the position, I will miss the trade and the price never comes back 20% of the time.
Then if I see a market opens with a strong trend in a few bars, how can I trade?
If you see 3 strong bars after a strong opening, whatever this is, and enter a trade you are bearing a huge risk. If you misread, your account blows up in a few shots. That is why Al instead promotes learning to catch the swing trades that have a lower probability of success but much less risk as well. Your chances to become succesful will grow exponientally losing less money each time you lose.
For example, if I see a strong opening and all the 3 bars after opening are large trend bars, should I buy or sell at market price?
Sometimes those strong bars are nothing else than a trap, others the start of a trend, depends on the context. See as an example of a trap buying the close of bar 7 on 10th Nov on the EMINI. On the open, no matter how strong a move is, 50% chance it will reverse, so very risky...
If I do open the position, 80% of the chance I will get a reversal but if I don't open the position, I will miss the trade and the price never comes back 20% of the time.
These chances are good for reference but what will tell you what happens in a given context is your bar-by-bar analysis so you can't rely on the said reference for entries.
Then you will miss a strong trend trade once a week by average if you choose to ignore the opening strong trend bars.
You miss one strong trend or your account's funeral, you don't know. The point I am making is that you have many trades every day so, why risking to take the ones that have the potential to kill you?
