Author: Shams ul Zoha
Advanced Ways to Enter a Trade
Trading the financial markets involves the implementation of a proper strategy with a proven outcome. Any good game plan includes a hard-to-understand yet straightforward procedure to enter a position. It may be complex, but a little hard work pays off in terms of consistency and gains. Traders can use technical indicators and fundamentals to aid in their entry. Some investors become so skilled at using advanced methods that they experience no drawdown whatsoever.
Key features to overlook before entering a position
Before using pro methods to enter a trade, you must incorporate the following key points to ensure that your analysis pays off:
Setup. There must be a good amount of confirmation in your trade. A trader can use multiple time frames, which we will discuss in our next section.
Risk-reward. The appropriate risk-reward ratio stands anywhere between 1:1 and 1:5. Using any numbers below or above this value may jeopardize your trading if you are a beginner or amateur.
Exit. Your take profit is as significant as the entry point in forex trading. Before entering a position, a trader should have all the processes laid out in his mind. Making decisions during the trade is something novices do.
Advanced entry methods for technical traders
Traders who use technical analysis utilize indicators and price action patterns to perform their executions. The simple entry methods involve analysis on single time frames and little to no implementation of indicators. With advanced techniques, pro-market participants get an edge as they incorporate multiple time frame analyses. Usually, the procedure is to take a buy or sell idea from the daily or H4 chart and then dive down into lower periods for finding an entry point. Let us take an example:
Weekly and Daily
A price action trader uses the weekly and daily key levels to point out potential support, resistance, and reversal areas. Afterward, he dives down to the daily time frame to see how the candles are developing.
Image 1: On the daily chart, the trader observes that the price is in a strong uptrend. However, it has shown rejection over the weekly key level, and as it aims for the point again, there is a chance it might bounce back. The daily candle also predicts bearish activity in the highlighted yellow region.
To enter his trade the trader dives down to the H1 chart to spot bearish engulfing candlestick patterns.
Image 2: The same highlighted yellow region on the H1 time frame shows bearish patterns developing over time at the weekly key level.
The trader uses M15 charts to see if there is a break of market structure to gain additional confirmation. This time, his enters nearly perfectly as he experiences no downside at all.
Image 3: The arrows point to the break of structure and entry points. The retesting strategy is common amongst advanced traders who use price action strategy.
Swing traders and scalpers can use relevant time frames according to their style. The concepts of technical trading are similar for different periods.
Advanced entry methods for fundamental traders
The fundamental analysis begins with the economic calendar. All the incoming news is considered before timing your entry. The financial releases should pertain to the instrument you are trading for, e.g., on EUR/USD, write down all the events from both the base and quote currency. Swing traders who trade on long-term trends may have to dig deep into a country's monetary profile and geopolitical tensions, while day traders keep their eye on the incoming NFP or earnings report.
It is also possible to get your buy or sell idea from fundamentals and then use technical indicators to time a sniper forex entry point.
Image 4: After the positive earning on Citigroup stock and the dividends report, a trader waits to take a buy. He waits for the 8 and 20 period moving averages to crossover for adding confirmation to his setup.
Automated trading algorithms
Dedicated trading robots trade on the behalf of traders' and provide signals. Their complex algorithms can make quick decisions based on hundreds and thousands of calculations that they make within seconds. With the developments in software and technology, neural expert advisors have recently taken the lead. These bots learn as they trade and can scalp traditional forex pairs such as EUR/USD with sniper entries. Other good examples of EAs that use advanced entry methods are arbitrage and grid systems.
About Forex Copier
Forex Copier is an automated software that helps you copy your trades on the same or different PCs. It has two versions:
Forex Copier remote 2 for copying trades remotely from one MetaTrader® platform to another.
Forex Copier 3 copies trade between MetaTrader® platforms on similar PCs..
The copy trading software has many valuable features, including lot/risk management, price adjustments, order filtering, tweaking SL/TP, and emergency stops to help you get an easy edge in the industry. It is possible to diversify your trading accounts and brokers by distributing your equity over several portfolios and using the auto trade copier to copy positions from one account to all of the others. You can also choose to sell subscriptions to your signals and EAs to investors worldwide, with or without access to their login credentials.
The scope here is unlimited, as the Forex Copier can help gurus in teaching by sharing their executions. For traders on a losing streak, the mirror trading software offers a reverse mode that turns all incoming buys into sales and vice versa with modifications of the exit and entry points.