5 Steps To Entry In The Forex Market
As a trader, you must know when to buy and when to sell before entering the market. Entry is very important and determines the final result in forex trading. A scalable and efficient entry method will determine trading success in the long run. However, many traders think that entry is an easy thing to do and do not look for the best possible entry to obtain optimal trading results. The right entry will provide better resk/reward potential including adequate stop loss placement. Here are 5 steps for entry in the forex market:
Last 3 Candles (Candle Structure)
When the candlestick chart is decreasing but the body of the candle is getting smaller, the declining chart does indicate that at that time the dominant seller was the seller. However, when the body of the candle is getting smaller, this indicates that there is resistance from buyers. So that the downward pressure will begin to lose by the upward impulse. When the upward pressure is greater than the downward pressure, the market begins to rise.
When the bullish candlestick body chart is getting longer, the length of the candlestick body shows a dominance of one party, whether the buyer or the seller. If a bullish candlestick appears with a body that is longer than the previous body, this indicates a stronger buyer dominance. The normal condition is that the market will continue to rise until the buyer's dominance is broken by the seller.
1 Candle Before Running
Every time there is a bullish candle pattern before the running candlestick, the next candle (the running candle) will also be up which is confirmed by looking at the candlestick pattern before the running candlestick in a larger time frame.
Psychology Level or Support Resistance
The psychological level is where the prices stop there, many stop and then come back. In essence, this psychological level is where the highest or lowest price then reverses. SNR is the level at which a trader sees many failed attempts that the price movement cannot exceed, this idea is familiar to most traders. The SNR area is taken from the location of the highest or lowest price in the past to determine the location of the SNR price in the future (can use a horizontal line or trendline). While the retracement area is an area where the price will correct. This area can be used for take profit.
Areas of Retracement or Correction
The retracement area is an area where the price is correcting. This area can be used for take profit. Retracement aims to test a strong up or down, so that the trend will reverse or not. Retracements are temporary, lasting only for a short period of time or a few days. The retracement is only a small correction in a larger trend because there is no change in the fundamental outlook. Before the reversal signal appears, the price chart experiencing the retracement will definitely reverse to its original trend. A bearish retracement will occur in the middle of a bullish trend, while a bullish retracement will occur in the middle of a bearish trend. There are some signs of a retracement, namely the price is near a certain psychological level, but that psychological level is not an important resistance level in the long term.
Trigger
Trigger trades can be thought of as lines in the sand that determine exactly when a trade will be entered. Unlike filter trades which can cover multiple factors, trigger trades tell the trader exactly when to act. Trigger trading should be strictly objective and clear in the trading plan. There should be no room for ambiguity.
Trading triggers can be based on a variety of conditions, from indicator values to crossing price thresholds, such as support or resistance levels. Many traders use technical analysis tools, such as indicators, to determine high probability settings in the market.
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