Market entry point - this is the most successful opening of a transaction, with such a position of the value of a trading instrument on the chart, which provides a guaranteed profit. Every trader who trades systematically tries to find an entry point to the market. To do this, he uses various analysis tools with which he builds his assumptions. But, in practice, there are no tools that are highly likely to say about this. Therefore, traders use an integrated approach using multiple data sources at once. The correct entry point will help you open a trade in time to get the maximum possible profit. In any case, it is necessary to use a systematic approach and analysis algorithms. Regularities provide concepts that will help shed light on the market and the behavior of large speculators, since they also use different inferences.
In trading, the power of the moment plays an important role in making profit. If you incorrectly calculate the entry point, and systematically make mistakes, then the main deposit of the exchange worker will not receive the desired profit. What is the point of working on Forex if it does not generate income! Therefore, the main task facing the trader is to fight the urge to act in a hurry, ignoring the areas of greatest benefit. At the initial stage, a lack of experience provokes a willful mood, and a thirst for experimentation.
In the financial markets, in order to open a successful trade, you need to understand two things.
- Which way to open this deal.
It is simply impossible to use a real deposit in trading while in such a state. To discuss the details of the under-earned profit as an example, it makes sense to consider one of the most productive profit figures, Head and Shoulders (H&S). Market fluctuations can be plotted using a Fibonacci grid.
- And in what place to open it, more precisely, at what levels, or at what time.
The next extreme leading to underestimated results is late entry into the position. Figure 2 shows the situation when a trader jumps into a departing train. You can also see how the price reached a profit, but due to the untimely opening of the order, the ratio of loss to profit is equal (thirty points of stop loss and 36 points of take profit). If we evaluate the trading of the “head and shoulders” pattern, then the predicted success is seventy-three percent (seventy-three out of a hundred trades will be closed with a plus by touching take profit, and twenty-seven will touch the stop loss). If the wrong moment is chosen when opening a position, then our profit will not be so significant. And for some strategies with a probability of fifty-three percent profit, profitability is generally excluded. You only have to pay for spreads and swaps. Realizing the senselessness of this approach.
several rules can be formed that seem to work well.
- 1. All trades must flow from your trading system.
- 2. Transactions must be made when the market is calm. The ship does not leave the coast during a storm.
- 3. Beware of spontaneous transactions.
- 4. Beware of entering the market during sharp movements in the rate, when volatility occurs unexpectedly.
- 5. Before starting, consider all pros and cons, as well as possible scenarios. There is no need to rush. The market is not going anywhere.
How to understand that the moment of entering the market is favorable enough?
- 1. You should adhere to the algorithms of your trading strategy and enter the market strictly according to it.
- 2. It is necessary to filter false signals using additional indicators.
- 3. Filter fundamental analysis with technical analysis and vice versa. The more filters are worth, the more correct entry points you will get. But it is worth remembering that a large number of filters significantly reduces the total number of points of entry into the market.
- 4. Never trade on emotions, but follow pragmatic logic.
- 5. Never buy or sell in the middle of a move. It is better to wait until it ends in order to successfully enter the market.
- 6. Use different types of strategies, as the market is quite volatile and one strategy cannot be profitable for a long period of time.
- 7. Buy or sell from strong resistance or support levels.