Hello, today we’ll be talking about entry points. Entry points are probably the most important part of trading, and good entry points let you enter the market with a good risk/reward ratio and high profitability. In my experience, people can use very good strategies, but still fail to profit, because they have dreadful entry points – that’s why it’s so critical to know when to enter a trade.
That is exactly what I’ll teach you today.
First, let’s refresh, our first step is to find an impulsive movement, they represent where an imbalance between buyers and sellers was formed. Then we wait for confirmation, in the form of a false breakout. After confirmation, we wait for a fractal, and that will be your entry point.
Let’s take a look at the live charts. We can observe the entries that formed on our last lesson.
We had these two impulses, potentially a big buyer at the bottom, and a big seller at the top.
Let’s remember that until confirmed, impulses do not equal levels, so you have to wait.
Here we see a false breakout, and when a candle closes below this zone, we can confidently say that this is a full-fledged level.
Now we wait for the price to return to the zone in the form of a fractal.
When that happens, you’ve got your entry point, put a stoploss a bit above the level, and your nearest goal will be the next closest level.
Then the price hits our take profit, in the process forming another impulsive zone, a bit harder to mark, but it’s certainly there.
Then another impulse happens
The price flirts with the level, but this can’t really be called a breakout, false or otherwise
Then the breakout does actually occur, a candle closes below the zone, followed by a candle that closes above, confirming it as a level, then it comes back, and the subsequent fractal is our entry point, with a stop loss below the local minimum and TP at the previous impulsive level.
After this, the price hits our last impulsive zone and breaks it, but unfortunately fails to come back. It’s fine, and you should not risk opening an order there. Better safe than sorry, even though your stop loss would be pretty small.
We get another impulse, followed by a smaller one. Let’s verify.
Price Breaks the bottom one, comes back, and there’s you entry. SL below the local low, take profit – the upper impulsive zone.
Risk reward comes up to about 1 to 4, which is decent
The price hits our take-profit, at the same tome breaking the impulsive zone at the top, lets verify this as well though.
After that, as we’ve learned, goes down, comes back, enter. Sl above local max, tp, closest zone. You know the drill by now.
Unfortunately, we stopped out, but this can be fixed by just entering at the new fractal, risk/reward gets a bit worse, but it’s still serviceable.
Here, before hitting my take profit, the price regrettably spiked and stopped me out. Happens, no biggie.
Anyway, that all for now, I think that the concept is pretty simple, as stated. Remember, the single most important thing for you to take away from this lesson is that you HAVE TO wait for a confirmation and only then enter, or you might just lose money, no one wants that.
Good luck on your homework, next lesson becomes available upon it’s completion.
Thanks for reading, and have a great day.