4 Tips for Accurate Entry

Entry is very important and determines the final outcome in trading. The measured and efficient entry method will determine the success of trading in the long run. However, many traders consider entry to be an easy thing to do and do not look for the best possible entry to get optimal trading results.

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

1. Using a Limit Order for Level Entry Accuracy

A limit order is a pending order that is determined above or below the current market price depending on the direction of the trade you are making. If you are trading long (will 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 level of entry you want then the buy order will be executed. Conversely if you are trading short (will open a sell position) then you can open a sell entry limit above the current market price. If the price moves up to the level of entry you want then sell orders will be executed.

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

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

2. Set Up Trade at Market Closure (New York Close)

Traders assume 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 important resistance and support levels, see possible trading signals and predict price movement trends the next day. For analysis it is recommended to use a daily time frame.

3. TLS Confluence (Trend, Level, Signal)

Confluence or compatibility between the current trend, key levels (important support or resistance) and trading signals will provide a high probability of success. The following is an example of an entry with the TLS configuration principle:

On the GBP / USD daily chart above the important support 1.66679 as a key level. The trend is clearly bullish, and the rejection pin bar forming a doji formation at the support level is a buy signal. The lowest level of the pin bar is around 50% of the retracement of the previous uptrend movement. Thus the TLS conference has been fulfilled. We can enter after a pin bar signal or with a pending order buy limit at the 50% retracement level (when the price starts retrace).

4. Checklist for Entry and Evaluation

Make a checklist to determine entry criteria, such as important support or resistance levels, trading signals with high probability, 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 you are trading.

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