Now who wouldn’t like to improve their trade entries? As you probably already know, trade entries are very important in determining whether you succeed or fail as a trader. But a lot of traders tend to take entries for granted by assuming they are the “easiest” part of trading. So they put little thought into getting the best entries. One good trade entry can make or break you. When it comes to getting better at your entries, there are certain concepts that can be used with any trading method.
So what are some things you can do to improve your trade entries? In this post I’m going to share with you some trade entry techniques that I use to help me find better entries. Let’s start with the first one,
Location (Key Levels)
You’re probably wondering what the heck I mean by location. Location means that you only take trades at or around key price levels. For example, support and resistance, supply and demand, moving averages, Fibonacci levels (swing highs and swing lows). I love fibs, it’s definitely my favorite but just recently I’ve added moving averages and I like them a lot too. A lot of novice traders are afraid they’re going to miss something so sometimes it’s hard to skip trade signals when they don’t occur at these price levels. But all of these levels are important and they each tell a story.
Higher TF Confluence
This is one of my favorites, I love using higher time frame confluences. Trading with the higher time frame can be beneficial. I love it when your higher and lower time frame align, trades usually run much smoother. This is really helpful if you’re trend following and trading the trend, which everyone should be trading the trend. The trend is your friend, right? Multiple TF analysis is one of the best ways to make sure that your trade has a good chance of winning. Traders often forget about it or simply ignore it, because looking at only one TF is easier. If you’re serious about trading, you need to be aware that a thorough analysis of different time frames is very important.
How does the multiple TF work and how should it be used? First of all, you have to consider your trading time frame. For example if it’s a typical intraday on the M15 chart, you need to check how higher TFs are arranged with respect to your M15. Use the same indicators on H1 and H4 charts to make sure that the market is set towards your trades. For the proper multiple TF analysis you should use at least three time intervals.
- If you trade on H1, analyze the trend on intervals D1, H4 and H1.
- If you trade on M15, check out how the trend on H4, H1 and M15 looks.
- If you scalp on M1, make sure that M15 and M5 intervals are compatible with your trade.
Analysis of several TFs will allow you to find currency pairs that have different time intervals pointing in the same direction. These are the type of trading opportunities that you should look for.
Size Of The Signal
Does size really matter? Well, I guess that depends on what type of trader you are. Some traders look for long term patterns while others look for short term patterns. I love using the higher time frames so I’m always looking for the long term patterns, even when I’m scalping. Long term chart patterns which consist of multiple candles usually have a much higher predictive value than single candlestick signals. A good long term pattern would be the Head & Shoulder example below, this is EURNZD on the 4H chart.
This kind of longer term pattern will provide much better context. They will tell you a whole story about what’s happening between buyers and sellers and how momentum is shifting between the two.
This point is a continuation of the previous one. Just like making trading decisions based on more candles is usually more effective, trading with more confluences can also improve the quality of your trades.
Always let the charts tell you a story and listen carefully, pay attention. The more confluences you have that support your trade idea, the better the signal. I look for at least 3-4 confluences before I consider a trade. For example, check out the different confluences for EURNZD for the sell. If entered after the break and retest of the first trend line, you would’ve caught over 400 pips.
The type of confluences can vary with your trading method, but this strategy works for all types of traders.
These are signals where you don’t have to think. This is a sign for how well you know your trading method, and does require some experience. When you analyze a chart, you should be able to say whether it’s an interesting setup within seconds. This does NOT mean that you enter right away but you should be able to tell whether the market conditions look good, whether you see a promising pattern or whether the market does not work for you at all.
Every Sunday I analyze charts and I eliminate all the pairs that don’t match my criteria and where the conditions don’t favor my style. Usually I’m able to tell within seconds whether a pair stays on the watchlist or if it’s not aligning with my method. After you know what type of chart patterns you like to trade, you develop the feel whether a market feels right or wrong and you can tell almost immediately. Again, this does not mean that you just jump in the market and open a trade. First you go through your checklist to see whether or not what you see is really a valid setup.
I wasn’t sure if I should list this technique or not because I think indicators can sometimes cripple a lot of traders. Some traders rely too much on indicators which is never a good thing. I would never recommend using an indicator by itself, all indicators work well with other confluences.There are so many indicators to choose from, moving averages, macd, harmonic scanners, supply and demand, the list goes on. Different traders like different indicators so what works for me might not work for you, and vice versa.
I personally like to use the crossing of moving averages to help with my entries. I also have an awesome macd platinum that I use. You can check it out in the picture below.
That’s my main trading template and I love it! I’m sure there are other entry techniques that you can use but I wanted to share with you the ones that I use personally. I hope you found this article helpful, and hopefully you can use some of these techniques to help improve your trading. Thanks for reading!