Probe Trades Vs. Full Trades (Key points/cheat sheet)

Here are the key points from our video ‘Discussing Probe Trades Vs. Full Trades (Recorded at the Duomo Method Live Event)’ that you can use as a reference guide or ‘cheat sheet. The video is available on our YouTube channel and at the bottom of this article.

  • There is a difference between a full trade and a probe trade. A full trade can be a small position size and can even be smaller than a probe trade. However, a probe trade is used with a specific intention and can be upgraded to a full trade eventually.
  • With a probe trade you are putting a position in the market with the intent that whether it goes in your favour or against you, you have the potential to add more to make it a full trade.
  • If you have a trade where the setup calls for a maximum of 1%, but given the context of the market you decide the maximum you would be willing to risk is 0.8%, that means the full trade would be 0.8%. However if you look at your chart and see that because of the structure or significant levels it’s best to put on a probe trade, you would put on a lower amount such as 0.4% with the intention to potentially upgrade it to a maximum of 0.8% as the movement develops.
  • An example of a situation where this could happen would be if you’re entering in the middle of an uptrend based on a minor significant level but you notice maybe 5 pips below there’s a major significant level.
  • Because we know that significant levels attract and repel the price, there’s potential for the price to be attracted to the major level. So you’re entering a trade knowing that there’s potential for it to go against you.
  • You may choose to enter a probe trade because if the market does reverse as you expect it to, you still profit from the setup, as there is still a certain amount of certainty there. However, if it goes against you to the next significant level, you have managed your risk and have the opportunity to increase your position size.
  • If it goes in your favour and you start to get the structure in the market, you can also turn it into a full trade. It’s also in situations when you’re not sure about the structure of the market and you maybe don’t want to commit fully yet, so you put in some money as a probe trade.
  • Increasing probe trades into full trades are the only times we add money to a losing position. You should never enter on a losing trade usually. Some people like to ‘average down’ a losing position by increasing their position at a more favourable price and having a better overall average price, but if the setup is broken this just means you are entering more trades on a whim rather than based on a setup being in play.

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