Wednesday, 13 November 2019

4 Tips for Accurate Entry

A scalable and efficient entry method will determine the success of trading in the long run. However, many traders consider entry easy to do and don't look for the best possible entry to get optimal trading results.

Proper entry will provide better risk / reward potential including adequate stop loss placement. Here are 4 tips for entries that can help improve trading results when applied consistently:

1. Use a Limit Order for Entry Level Accuracy

A limit order is a pending order that is set above or below the current market price depending on the direction of the trade you are doing. If you are trading long (going to open a buy position) then you can open a buy limit entry below the current market price, and if the price moves down to the entry level you want then the buy order will be executed. Conversely, if you trade short (will open short positions) then you can open sell limit entries above the current market price.

If the price moves up to the entry level you want, the sell order will be executed. Besides the limit order, other options for pending orders are stop orders, namely stop buy orders and stop sell orders. If you trade long, then you can open a buy stop entry above the current market price, and if the price moves up to the entry level you want, the sell order will be executed, and vice versa for the stop sell order.

However, from the trader's experience, in stop orders slippage or price jumps often occur, so you can get a more expensive price when you buy and a lower price when you sell. Slippage usually occurs when market volatility is high and only on stop orders (stop buy or stop sell), therefore traders prefer to limit orders when using pending order facilities.

Limit orders allow you to get an accurate entry price as desired. One method that is often used is an entry limit order at a 50% retracement of a trading signal (eg pin bar) because the probability of trend forwarding at that level is usually high, so you can place a stop level with the smallest possible distance until you get high risk / reward ratio.

2. Set Up Trade at the Closing of the Market (New York Close) T

rader forex assumes the closing price is the price when the New York market closes. At that time only the New Zealand market was just starting to open and the trading volume was relatively very low.

To avoid market noise you can analyze and setup around that time, determine important resistance and support levels, see possible trading signals and estimate the trend of price movements the next day. For analysis, it is highly recommended to use daily time frames.

 3. TLS Confluence (Trend, Level, Signal)

Conflict or compatibility between the current trend, key levels (important support or resistance) and trading signals will provide a fairly high probability of success. Here are some examples of entries with the principle of TLS confluence:

4. Checklist for Entry and Evaluation

Make a checklist to determine entry criteria, such as support or resistance levels that are considered important, high probability trading signals, estimated entry level, risk / reward ratio and others. This checklist is also for evaluating trading results as a reference or to be corrected for the next trade. A checklist is needed to make it easier to recognize the characteristics of the movements of the currency pairs that you are trading.

Also Raed : How to Implement Effective Price Action

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