Your Step-by-Step Guide to Finding High-Probability Trades

Step 1: Time Your Trading Around Market Conditions & Economic Events

Before identifying any trade setup, it's critical to assess the broader trading environment. Market conditions vary significantly depending on the week of the month, day of the week, and session time. In addition, scheduled economic events can drastically affect volatility, sentiment, and trade outcomes.

Use the following guidelines to position yourself for higher-probability opportunities while avoiding unnecessary risk:

• Know the Monthly Trading Cycle
  • Week 1 & Final Week: Markets tend to be choppy or range-bound due to rebalancing and major economic data releases (e.g., NFP, CPI, FOMC). Use mean reversion strategies and reduce risk.
  • Week 2 & 3: Liquidity and conviction increase as participants digest macro data. Trend-following and breakout strategies typically perform best here with normal to full risk allocation.
• Follow the Weekly Strategy Framework
  • Monday: Price discovery, false moves, and choppy behaviour. Best for range-bound setups, light exposure, or observing trend formation.
  • Tuesday–Thursday: Highest liquidity and follow-through. Best suited for breakouts, trend continuation, and momentum strategies.
  • Friday: Prone to reversal and profit-taking. Best for scalping, fading extended moves, and trimming trend trades. Ideal for reviewing and de-risking into the weekend—especially near month-end or after major events.
• Respect Session Timing
  • London & NY Opens (07:00–10:00 UTC, 12:00–16:00 UTC): Ideal for breakouts and trend-following setups due to spikes in volume and volatility.
  • Late NY to Asia Session (20:00–04:00 UTC): Favourable for mean reversion and liquidity trap strategies in thinner markets.
• Track Major News Events → Be aware of scheduled economic releases such as CPI, FOMC announcements, interest rate decisions, and Non-Farm Payroll (NFP) reports. These events often cause sharp, unpredictable moves.
• Avoid Trading During High-Impact News Windows → Refrain from entering new trades 30–60 minutes before and after major economic releases. This is when volatility spikes and price action can become erratic.
• Monitor Market Conditions → Sudden spread widening, stop-run events, or unpredictable reversals are common during volatile news periods. Stay vigilant and manage your risk accordingly.
• Wait for Stability → After a major news release, wait 15–30 minutes for the initial volatility surge to settle before identifying new setups.
• Use an Economic Calendar → Use the Economic Calendar on our Managing Risk During Key Economic Events page or Charts & News page to stay informed of key economic events that may impact the market. Focus especially on high-impact USA news.

Key takeaway: Aligning your trading approach with the monthly cycle, weekly rhythm, session dynamics, and macroeconomic calendar significantly improves edge and trade quality. More information about managing risk during high-impact events can be found here.

Step 2: Analyse Previous Day’s Performance

Reviewing the Previous Trading Day’s Performance is crucial for identifying potential continuation or reversal opportunities. This step helps you understand which symbols displayed strong momentum and whether those moves are likely to persist.

Start by examining the following key metrics:

• Daily Gainers / Daily Losers → Identify symbols that experienced significant price movement. Large gainers may indicate bullish continuation potential, while large losers could suggest bearish continuation or mean reversion setups.
• Highest Open Interest Change → A notable increase in open interest signals heightened trader commitment. This often supports the strength of a previous move and may lead to sustained momentum the following day.
• Relative Volume (RVOL) → Look for symbols with exceptionally high RVOL readings. Typically, look for symbols with an RVOL greater than 1.5 (ideally 2) times the 10 period average. Increased participation often confirms genuine interest in the move, improving the probability of continuation or reversal setups.

Key takeaway: If a symbol displayed strong momentum yesterday and continues to show elevated volume and open interest today, it could be primed for continuation. Conversely, if a symbol had an extreme move but is reversing today, it may present a strong mean reversion opportunity.

Step 3: Evaluate Current Market Conditions

To make informed trading decisions, it's essential to assess the current market environment. Go to the Current Trading Day's Performance page for a comprehensive overview of what's happening within the market right now.

When evaluating the current market conditions, pay attention to the following key metrics:

• Major Market Overview & Trend Breakdown → Is the market showing signs of high, medium or low volatility? Determine whether the market is trending (bullish or bearish) or ranging (neutral) to guide your strategy.
• Daily Gainers / Daily Losers → Identify which symbols are currently experiencing significant price movements. This indicates where the most market activity is taking place, which could present opportunities for continuation or reversal.
• Highest Daily Relative Volume → Is there increased participation in the market today? A high RVOL indicates strong market interest and can confirm that price moves are backed by genuine activity.
• Highest 1-Hour Open Interest Change → Identify symbols with a notable increase in open interest over the past hour—ideally exceeding 0.5%. A sharp rise often reflects growing market commitment, which can precede impactful price movement.
• Highest Hourly Open Interest vs 10-Hour Average → Look for hourly open interest that surpasses the 10-hour average. This suggests an uptick in market activity on a shorter timeframe, indicating potential for short-term price movement.
• Trading Above PDH / Trading Below PDL → Are we seeing a breakout or breakdown? Pay attention to whether the market is trading above the Previous Day High (PDH) or below the Previous Day Low (PDL), as this signals possible breakout conditions.

Key takeaway: If the market is trending strongly, trend-following strategies will be more effective. Conversely, if the market is ranging, mean reversion strategies may yield better results.

Step 4: Assess Market-Wide Liquidity & Volatility

To identify the most active and tradable symbols in the market, use the Market Overview page. This page provides a detailed view of the market's liquidity and volatility, helping you focus on symbols that have the highest potential for profitable moves.

To evaluate the liquidity and volatility of symbols, focus on the following key metrics:

• Top 10 Most Liquid → Trade symbols that have deep liquidity. Symbols with high liquidity allow for easier entry and exit with minimal slippage.
• Highest Open Interest Change % → Observe where traders are positioning their capital. A significant change in open interest suggests growing market participation, which often correlates with increased price movement potential.
• Highest Daily & Hourly Relative Volume → Look for assets with high RVOL readings, indicating momentum. High relative volume confirms strong interest and supports the sustainability of price moves.
• Most Volatile → Identify symbols with high price movement. These assets present opportunities for larger profits, though they may carry higher risk.

Key takeaway: Focus on symbols with high open interest, strong relative volume, and above-average volatility. These symbols are more likely to experience sustained price movements, providing more opportunities for profitable trades.

Step 5: Find the Best Candidates

This is where we shift from market awareness to execution. Use the Premium Scanners tool to identify the highest-probability trade candidates based on real-time market conditions. Each scanner is precision-engineered to uncover specific types of setups—ranging from breakout momentum to volatility imbalances, mean reversion pivots, and trend continuations.

Begin by combining your macro and timing awareness from Step 1 (session timing, economic events, and the trading cycle) with your market condition read from Step 3. This layered approach ensures you're using the right scanner at the right time and filtering only for setups that make sense in context.

• Trending Market → Use the Market Pulse, Trend Following, High Conviction Daily Momentum Plays and Next-Leg Leaders scanners to find symbols showing directional conviction, clean price structure, and sustained strength. These scanners are built for high-conviction entries aligned with dominant trends.
• Volatile Market → Use the Daily Volatility Momentum and Intra-Day Volatility Momentum scanners to capture explosive price action as it unfolds. These scanners filter for high-energy setups, but also enforce funding neutrality and tight spread-to-ATR conditions to preserve trade stability.
• Ranging Market → Use the Mean Reversion scanner to find overextended price moves within range-bound markets. Ideal for traders who want to fade extremes with a statistical edge.

All Premium Scanners apply strict filters for volatility, liquidity, spread-to-ATR ratio, and funding balance—ensuring the symbols you see are fast-moving, liquid, and technically clean. The best candidates will often show up across multiple scanners simultaneously, giving added confirmation and priority.

Key takeaway: Let the scanners do the heavy lifting. When you time your trading using the awareness from Step 1, and apply the focused filtering of Step 5, you significantly increase the odds of trading only the best setups at the right moments—maximising edge, precision, and return on risk.

Step 6: Create Your Watchlist

After evaluating the previous steps, it's time to build a focused watchlist of the most promising symbols to track for potential trades. This step ensures that you're looking at only the highest probability opportunities based on your analysis so far.

Always refer to your Trading Checklist to ensure you're identifying the most promising trading opportunities.

• Select Symbols with Strong Market Activity → Choose assets showing strong signs of volatility, participation, and liquidity, as these are the ones that present the best opportunities for price movement.
• Review Symbols with Favorable Technical Indicators → Include symbols where your technical indicators (e.g., trend indicators, support and resistance levels) align with your strategy for entry.
• Include Symbols with Increasing or Stable Open Interest → Look for symbols with increasing or stable open interest, which signifies healthy trader participation and reduces the risk of manipulation or sharp price moves.
• Track Symbols with Favorable Funding Rates → Avoid overcrowded trades. Focus on symbols with balanced funding rates to minimize risk from large forced liquidations or squeezes.
• Monitor Volatile Symbols with Price Action → Include assets that are showing strong price movement and are likely to continue due to recent momentum or a breakout.
• Update Your Watchlist Regularly → Continuously refine your watchlist based on the evolving market conditions, such as changes in volatility, volume, and open interest.

Key takeaway: A well-crafted watchlist is the foundation of your trading decisions. Keep it focused on high-potential candidates based on active participation, solid technical indicators, and strong momentum to maximize profitability.

Step 7: Identify and Mark Key Areas of Interest

Once you've identified potential trade opportunities and built your watchlist, it's essential to analyse the charts with precision, like a seasoned trader.

For each symbol in your watchlist, open the corresponding chart by clicking the View Chart link in the table, scanner, or watchlist.

On the chart, mark these key levels to outline potential trade zones:

• Previous Day High → A potential resistance level where sellers may become active.
• Previous Day Low → A potential support level where buyers may step in.
• Previous Day Close → A neutral reference point often used to assess market sentiment.
• Daily Supply and Demand Zones → Highlight key areas above and below the current price where strong buying or selling pressure could emerge. Use bearish engulfing bar patterns above the current price and bullish engulfing bar patterns below the current price on the daily chart to identify these zones effectively.
• 1-Hour Supply and Demand Zones → Identify smaller zones that may indicate temporary pauses, reversals, or consolidation points before the trend resumes. Use bearish engulfing bar patterns above the current price and bullish engulfing bar patterns below the current price on the 1-hour chart to pinpoint these levels with precision.

Key takeaway: Marking these strategic levels on higher timeframes like the daily and 1-hour charts provides greater context when analysing price action on the 5-minute chart. This helps you make informed entry and exit decisions with improved clarity.

Step 8: Analyse BTC and Its Impact on Symbol Selection

BTC's price action plays a crucial role in the overall market sentiment, making it vital to analyse its key levels and behaviour. When ranking your watchlist, consider categorising symbols into two distinct groups:

• Symbols Trading in Alignment with BTC → These symbols tend to follow BTC's overall trend and momentum. In strong bullish or bearish BTC conditions, aligned symbols often present reliable trade opportunities with clearer directional bias.
• Symbols Decoupled from BTC → These symbols show price action that diverges from BTC’s movement. Decoupled symbols may indicate independent strength or weakness, often offering standout trade opportunities during choppy or indecisive BTC conditions.

Which to Focus On: Prioritising symbols that align with BTC’s trend generally offers higher-probability trades during strong market trends. However, during periods of BTC consolidation or indecisiveness, focusing on decoupled symbols may uncover unique opportunities that outperform the broader market.

Key takeaway: By carefully ranking your symbols based on these factors, you'll be better equipped to pinpoint the highest-probability trade setups and improve your overall decision-making process.

Step 9: Elevating Your Trade Selection

Now that you’ve built your focused watchlist of potential trade setups, you’re ready to take your analysis to the next level. In this optional advanced step, you’ll evaluate and rank each opportunity to determine which trades have the highest potential for success.

For each symbol in your watchlist, consider the following factors to assess its ranking:

• Trend Strength → Does the symbol show a strong and consistent trend (up or down)? A well-established trend usually indicates a higher-quality trade.
• Volatility → Is the symbol exhibiting enough price movement to support potential gains? Higher volatility generally opens up more profitable opportunities.
• Volume and Liquidity → How active is the symbol? Strong volume and liquidity ensure smoother price movements and reduce slippage.
• Support and Resistance Zones → Is the symbol approaching key support or resistance levels? These levels often serve as critical decision points for price action.
• Sustained Open Interest Growth → Has the symbol experienced consistent open interest growth across multiple timeframes? This indicates sustained market participation and confidence, signaling potential for continued momentum. Use the Open Interest Analysis Charts on the Charts & News page to identify assets with growing interest, which can amplify trend strength and market participation.
• Risk-to-Reward Ratio → Are the potential rewards worth the risk? Carefully assess the risk-to-reward ratio to identify symbols that provide the best return on your investment.

Key takeaway: Ranking your symbols using these key factors will help you filter out lower-probability setups, allowing you to focus on trades with the strongest potential for success. This structured approach enhances your ability to make informed and confident trading decisions.

Step 10: Execute Your Entries and Exits

With the key levels from Step 7 mapped out, shift to the 5-minute chart to refine your entry and exit points for optimal trade execution.

Follow these steps to confirm strong trade signals:

• Identify Price Reaction at Key Levels → Observe how price behaves near the marked support, resistance, or supply/demand zones. Look for wicks, pin bars, or sharp reversals that indicate rejection.
• Wait for Confirmation → Confirm price action candlestick patterns such as engulfing candles, bullish/bearish pin bars, or strong momentum candles before entering a trade.
• Monitor Volume → Increased volume near key levels strengthens the validity of the rejection or breakout.
• Use Limit Orders Strategically → Enter using limit orders to secure better entry prices at key levels rather than chasing impulsive moves. Great for break and retest moves.
• Define Your Stop Loss → Place your stop loss just beyond the key level or the most recent price structure to minimize risk if the trade fails.
• Plan Your Take Profit → Identify clear profit targets using nearby resistance/support zones, or consider scaling out of the position as price moves in your favour.

Key takeaway: Only execute trades when price action shows strong signs of rejection or absorption at a 1-hour support or resistance level. This ensures you are trading with precision and higher probability setups.

Bonus Step: When to Stay Out of the Markets or Be Cautious

In day trading, timing is crucial, and knowing when to stay out can be just as important as knowing when to enter. Certain scheduled economic events significantly increase market volatility, making conditions unpredictable and risky.

Key Times to Be Cautious or Avoid Trading

• 30–60 minutes before and after major economic releases.
• During periods of thin liquidity (e.g., early pre-market or late trading sessions).
• When multiple high-impact news events are scheduled close together.

Major Economic Events to Watch For

• CPI (Consumer Price Index)
• FOMC (Federal Open Market Committee) Announcements
• Interest Rate Decisions
• Non-Farm Payroll (NFP) Reports
• GDP and Inflation Data Releases
• Unemployment Rate Reports
• Unexpected Speeches or Emergency Announcements

Why It Matters

These events can trigger:

• Whipsaw price action with unpredictable reversals.
• Increased spread widening leading to slippage.
• Stop-run events that manipulate key levels before reversing.

If you must trade on high-impact news days, consider waiting until the initial volatility surge settles — often 15–30 minutes after the release — before identifying setups. For more information about how you can manage risk during economic news days can be found here.