Menu

Skip to content
  • About
  • Contact
  • Freebies
  • Join Mailing List
  • Join The Forex Trade Gravy Train
  • My Personal Take On easyMarkets

Forex Filli

Free Price Action Trading Tips For Newbie Forex Traders

Tag Archives: Two Strategies For Finding The Best Trading Entry Point

06.11.19
by Kwasi Kisiedu

How To Find The Best Entry Points For Your Forex Trades

 Hello and Welcome To another edition of the bulls vs the bears. Today we are going to learn how to find the best trade entry points for your forex trades.  Your trade entry should satisfy two requirements: A reliable stop placement and humongous risk/reward potential.

I can hear someone saying”That’s easy for you to say.” Sure perfect entry points may be as rare as the eclipse of the moon.But it takes a little patience and a hunter’s mindset to spot them. So we’ll do two things. We’ll   look at three strategies  for finding the best trade entry points.  

First off:

Two Strategies For Finding The Best Trading Entry Point

First things first, look out for obvious price signals. The price signals should be as clear as day that you’d be blind not to see them. The daily chart frame is a good place to start from. Why? because the signals and patterns are so crystal clear you can’t afford to miss them. Next you are looking for confluence of factors that back up the price signals And by that I mean you look back at the previous trading periods to check whether the signal aligns with other key levels or has formed via a pullback.

For more information on confluence of factors look up Something Called Confluence

Basically make sure the signal lines up with as many supporting factors as possible to constitute the best trade entry point. If you are thinking of tweaking your trade entry, don’t even try it. you will receive severe burns to your trading position.

Now some of are asking:

Why The Wait For A Better Trade Entry?

1) First off, it  frees you to insert a tight stop loss which in turn makes you a profit on a substantial risk/reward. This means you can trade for a bigger position size.

2) You reduce the risk of being stopped out for a huge loss because you placed your stop loss out of harm’s way. by that I mean you placed your stop loss in a safer place.

3) You get to wait patiently while the trade forms. patience comes in handy especially if you are not totally sure that the trade is worth risking your precious cash on. While you wait patiently you place your stop loss. In so doing you save your self the heartache of a tsunami-sized stop out no to mention being wiped out by the market itself.

Now that we have gotten the reasons out of the way, let’s look at  a few examples of spotting the perfect trade entry

Image result for pin bar sell signal

Ladies and gentlemen, here is a clear bearish pin bar signal(circled in red) along the level of resistance via the GBP/USD pair. The tail of the pin bar is obviously sticking out like a sore among the neighbouring bars. This must tell you that  the bears are planning their reversal and that they are going to push price further down in the future.

Now let’s look at the factors supporting the sell signal using the AUS/USD pair in the price action below

Using-Pin-Bar-Price-Action-Trade-Forex-Confluence

As you can see the evidence required to make a trade entry is  there for you to see.  We see  a downtrend that has been developing for a month with the signal developing after a pullback to the level of resistance. The signal so obvious that you don’t need a bolt of lightning to tell you that it’s time to make the trade. And of course the risk/reward potential is huge.

Since this is a long term trade you don’t need to stare at your screen like a bodyguard. Just get out of the house and head to the beach while your trade entry racks up the profits.

Now we’ll look to tweak our trade entry and improve our risk reward potential

Image result for how to improve on risk reward potential of forex trade

Here we try to make our entry at the 50% point of the pin bar. There is no way we can get it at exactly 50% as it’s literally impossible. Not even Einstein could have got that right. But you can make your grand entry at the point of retrace just under the the 50% point and with a stop loss just below the pin high.  Aside placing a stop loss you could improve your risk potential from RR1 to RR2 as indicated above. Some have been known to increase the risk/reward to RR3.

Now let’s look at another entry example  using the daily time frame

Image result for forex pin bar in daily chart time frame

Ladies and gentlemen, here is a trade entry in the daily time frame via the EUR/USD pair. We have a bearish pin bar forming as a result of the bears doing a sharp reversal. And just like the previous example, the pin bar clearly sticks out like a peacock. You can’t miss it.

As you can see a pin bar formation is taking place at the level of resistance  on the weekly chart. It’s pretty much consistent with the pin bar formation in the downtrend of the daily chart frame.

Massive pin bar

Finally let’s take a look at  a long tailed pin bar setup in the daily chart price action

Clearly we see a long tailed bullish pin bar at the level of  support on the right side of the chart.  That of course kicks of the bullish charge.  With your knowledge of long tailed pin bars, nobody needs to tell you that’s a the perfect entry point to put in your trade. No to mention the huge risk/ reward benefits that you will accrue from this setup

That’s a wrap for “How To  Find The Best Trade Entry Points for your forex trades”.   What you  need to understand from this lesson is that the best trade entries form with the help of supporting factors.  Basically you are looking for the coming together of a signal and a level, or  a signal and  a trend, or even a level and a trend

The trend at the time should be painfully obvious with the signals formed at a key level. With a little patience, training and reliable instincts you should be able to make your entry with consummate ease.

Till next time take care.

Opening Of Live  Forex Trading Account

If you’re looking to open a live trading account sign up with EasyMarkets.

 

Share this:

  • Twitter
  • Facebook

Like this:

Like Loading...
Standard | Posted in Strategy | Tagged Entry Points, Live  Forex Trading Account, Opening Of Live  Forex Trading Account, Price Signals, Two Strategies For Finding The Best Trading Entry Point, Why The Wait For A Better Trade Entry? | 2 Comments

Looking to Start A Blog?

Sign Up With Wordpress.com

Looking To Practice Trading and Get A Feel of A Trading Platform before Trading Live?

Open A Free Demo Account With easyMarkets

Download For Free Forex Trading e-Books by easyMarkets

Getting Started Trading
Understanding Analysis
MT4 User Guide
Psychology of Trading
Trader Central User Guide

Looking To Learn Everything There Is To Know About Price Action Trading?

Download Free eBook - Ultimate Guide to Price Action Trading

Looking to Join Forex Filli Mailing List?

Sign Up To Join Mailing List

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 634 other followers

Wanna Learn About Easy Markets One on One Training

Watch Training Videos

Recent Posts

  • How to Trade and Laugh All the Way to The Bank With Bearish and Bullish Pennants
  • How To Trade Breakouts Via Rectangle Chart Patterns
  • How to Trade and Cash in on Wedge Chart Patterns
  • How To Ring In The Profits Trading The Head and Shoulders Pattern
  • How To Make The Most Out of Double Top and Double Bottom Chart Patterns

easyTrade App- An Easy Way To Trade

Watch Video

Submit Your blog to Blog Flux

Blog Directory

Wanna Know About What EasyMarkets One On One Training?

Watch Forex Training Videos

Give Your Trade A Second Chance

DealCancellation - Helps Undo A Losing Trade

Recent Comments

Kwasi Kisiedu on What The Heck Is Price Action…
Kwasi Kisiedu on What The Heck Is Price Action…
Kwasi Kisiedu on Why Is Forex Trading Such a Gl…
Kwasi Kisiedu on What The Heck Is Price Action…
Kwasi Kisiedu on Identify Support and Resistanc…

Archives

  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • August 2016

Forex Filli Facebook Page

Forex Filli Facebook Page
Follow Forex Filli on WordPress.com

Popular Categories

Forex Filli

Forex Filli

RSS Feed

RSS Feed

General Pin Bar Strategy Trader Psyche Trends
December 2019
M T W T F S S
« Nov    
 1
2345678
9101112131415
16171819202122
23242526272829
3031  
Advertisements

Bloggin Fusion

Blog Directory
Blog at WordPress.com.
%d bloggers like this: