Successful traders consistently choose the most profitable action. Target strong highs and lows rather than equal ones: about 70% of the time, strong extremes lead to better outcomes versus 30% for equal highs and lows. Over a large sample, this statistical edge compounds into long-term profitability.
You've got to understand this. A very fundamental thing about trading is that in trading, you are always optimizing towards the most profitable action over time. Now, based on everything that I've established so far about relatively equal highs and lows and liquidity concepts, do you think that it would be statistically smarter if we were to be trading into relatively equal highs or lows, or would it be better if we were to trade strong highs and lows instead? Well, anyone with half a brain would probably tell you that, yeah, strong highs and lows, it makes sense. And that's the thing, and that's your answer right there. Doesn't matter that, you know, sometimes relatively equal highs and lows do not get swept and they actually lead to a good move, it doesn't matter. Why? Because statistically speaking, that happens way less often compared to if you were to just use the strong high or strong low. Essentially, you're going to be way more profitable using the strong highs and lows as compared to relatively equal highs and lows. So if we were to kind of like really break this down in terms of statistics, right, let's say 30% of the time relatively equal highs and lows end up playing out, but 70% of the time you're better off taking a strong high or low. Which one should you take? That's right, the 70% one. It's not to say that strong highs and lows are going to be always superior in every single instance. The truth is, it's not. But statistically speaking, if you apply this to a long enough sample size, it is. And that is the fundamental truth that you need to understand about trading if your goal is to make it in the long run.
