4 Forex Tips For Accurate Entry
A measurable and efficient entry strategy will determine long-term trading success. Therefore, with the following tips, you will be able to improve trading results.
Entry is very important and determines the final results in forex trading. Measured and efficient entry methods will determine long-term trading success.However, many traders who consider entry are easy to do and do not look for the best possible entry to obtain optimal trading results.
The right entry will provide a better risk / reward potential including adequate stop loss placement. Here are 4 tips for entry that can help improve trading results when applied consistently:
1. Using Limit Order For Level Entry Accuracy
A limit order is a pending order specified above or below the current market price depending on the direction of trading you are performing. If you are trading long (you will open a buy position) then you can open the 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 are trading short (will open short positions) then you can open a sell limit entry above the current market price. If the price moves up to the entry level you want then the sell order will be executed.
In addition to limit orders, other options for pending orders are stop orders, ie stop buy order and stop sell order. If you are trading long, then you can open an entry stop buy above the current market price, and if the price moves up to the entry level you want then the sell order will be executed, and vice versa for stop sell order.
However, from the experience of traders, on the stop order often occur slippage or price jump, so you can get a more expensive price when the buy and lower prices when selling. Slippage usually occurs when market volatility is high and only on stop orders (stop buy or stop sell), therefore traders recommend the limit order when using the pending order facility.
Limit orders allow you to get an accurate entry price as desired. One of the most commonly used methods is the entry limit order of the 50% retracement of the trading signal (eg pin bar) because the probability of forwarding the trend at that level is usually high, thus you can place the stop loss level with the smallest distance possible to obtain risk / reward ratio is high.
2. Set Up Trade at Market Closure (New York Close)
The forex trader assumes the closing price is the price when the New York market closes. At that time only the New Zealand market began to open and trading volume was relatively very low. To avoid market ‘noise’ you can analyze and setup around that time, determine key 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 a daily time frame.
3. TLS Confirmation (Trend, Level, Signal)
The confluence or match between the current trend, key levels (important support or resistance) and the trading signal will give a high probability of success.Here are some examples of entries with the TLS confluence principle:
On the GBP / USD daily chart above the important support 1.66679 as the key level. The trend clearly seems to be bullish, and the rejection pin bar that forms the doji formation at the support level is the buy signal. The pin bar’s lowest level is approximately 50% of the previous uptrend retracement range. Thus the TLS confluence has been fulfilled. We can enter after the bar pin signal or by pending limit buy orders at the 50% retracement level (when the price starts retrace).
On the daily XAG / USD chart above, the trend is clearly bearish, and the rejection pin bar formed at the key resistance level (key level) is a signal to sell. The highest pin bar level is around 50% of the retracement of the previous downtrend movement. TLS confluence has been met, and we can entry after pin bar signal or by pending order limit sell at 50% retracement level when price starts to retrace upwards.
4. Checklist for Entry and Evaluation
Make a checklist to determine entry criteria, such as important support or resistance levels, high probability trading signals, entry level estimates, risk / reward ratios and more. This checklist is also for evaluating trading results as a reference or to be fixed in the next trade. Checklist is required to make it easier to recognize the characteristics of the movement of the currency pair you are trading.