Fundamentals of securities trading:
Price oscillates up and down – while trending in direction.
Oscillations tend to occur between levels of support and resistance.
Oscillations and trends may differ with selected viewing time frame.
Successful trading involves:
Selecting a potential oscillation with sufficient risk/reward potential.
Entering trade early enough in the oscillation to improve the opportunities for profit.
Taking profit as oscillation matures – or exiting if oscillation reverses.
In addition to the above, I personally seek:
A reward vs risk potential of at least three.
A profit vs loss ratio greater than fifty percent. Trading can be profitable with a fifty percent win ratio, but gain increases significantly when this ratio is higher. My personal goal is seventy-five percent or greater.
I use the RMI as my primary indicator to achieve my 75% goal.