Whether you are a new or long-term participant in the Forex market, you surely know and understand the importance of entry points.
By waiting for a better entry point, it allows you to have a “tighter” (shorter) stop-loss and to increase the risk/reward ratio (earn more). You can trade with larger lots without risking more than the amount of your acceptable stop-loss.
You can reduce the risk of an order hitting the stop-loss. Because your stop-loss point now locates in a safer position (because the entry point is better). Your order will have more “breathing space”.
But many traders think this is the easy part of trading. They pay little attention to how to get the best Forex entry points (do you？).
In todays article, I want to share with you how we can get the best entry point. From there, you can improve your skills and the amount of money in your account.
Use limit orders in Forex to get better entry points
A pending order is an order you have executed but it has not yet appeared in the market. You can set your own matching price (higher or lower than the current price).
The pending order gives you additional power, which is choosing the exact price as you desire. Pending orders do not always match. And you may (sometimes) miss an opportunity with just a few pips. However, with matched orders, obviously, you have a better entry point. The stop-loss is also much better.
Your risk/reward ratio also gets better. You can always get a profit ratio of 2R or greater if a pending order is matched.
Notes: Pending orders allow you to let the market “serve you” and match your desired price. You need to be mentally prepared that it may waste a few (or more) opportunities. However, with a much better and greater risk/reward ratio and stop-loss, the pending order is a great companion.
Manage orders at the end of New York session
If you‘ve ever read my articles, this is what I’ve been talking about many times and in detail. I will point out the main points below.
Analyze the market and manage orders when the New York session closes. This is an easy and effective way to increase the quality of every entered order. You dont need to stay up all night. Feel free to sleep a good night and when you wake up is the best time for you to turn on the computer and observe the market.
The daily chart (D1) provides more meaning and “credibility” than charts at lower time frames. Completely focusing on this chart helps you get better and more accurate Forex entry points.
Signals based on daily charts are more “real”. The market always floats with random fluctuations in a narrow range. In low time frames, you are more likely to get “seasick”. This makes you not get a good idea when the price goes up a bit and then goes down a bit.
Notes: Low time frames here are the ones below H1, for example, M30, M15. In my opinion, you should limit using H1. H4 is also good to use. And you should use D1 as the main time frame. Just focus on it.
Wait for the factors: (T.L.S)
90% of the transactions I made using the T.L.S. What is this？
T = Trend
L = Levels
S = Signal
You need to know which market you are in. The price is up, down, or unclear (Trend). You need to know where the support and resistance are (Levels). And you need to watch for signals that the market offers to see if they fulfill all conditions for placing an order (Signal). When these 3 factors appear together, dont hesitate. Place an order immediately.
For better understanding, please see the picture below:
Have a simple and serious trading plan to follow
Your job is not just to find the entry point and execute it. It is to patiently “prey” upon the opportunity to appear and find CORRECT orders. Do not rush carelessly and recklessly.
A simple and effective trading plan/strategy will help you filter out good signals among many not-enough-good ones. This helps you to earn money in the long term.
A good plan consists of locating signs (if any), identifying nearest support/resistance, and finding market trends. If the chart shows you that they (the conditions) are converging, consider entering an order immediately and shutting down the computer. Let the market finish the rest of the work. Do not interfere with the order before the market does.
Everyone has their own personality, customize your trading plan/strategy. Only you can fit it. And when you have one for yourself, follow it strictly. The grass is always greener on the other side of the fence. Do not get lost when someone out there bragging about a strategy that can earn you thousands or millions of dollars a day.
My purpose in writing this article is for you to understand the importance of a good entry point. Also, I would like to show you how to achieve the best possible price for your order. A better entry point leads to a better stop-loss point. These can help you avoid market volatility and provide additional opportunities.
You can learn and try trading with my strategy (price action) by following the posts in this blog. You are completely free with serious and quality content.
Please share so that more people have more knowledge when trading in the riskiest forex market. Have a nice weekend.