Trade Entry Techniques

Most traders tend to concentrate on pinpointing the perfect entry for a trade. However, in reality the entry price is just one part of the equation. The common entry techniques are:

Channel Breakouts

A trend trader will tend to use channel breakouts to enter trades in order to catch a trend when it is beginning. The general rule is to pick a period length, which could be 20 days for a long term trader or 15 minutes for a daytrader and buy if the high in that period is broken or sell if the low is broken.

Visual Entry based on patterns

The art of technical analysis focuses on the many types of chart patterns that markets tend to form. Such as gaps, spikes, inside days, outside days, triangles, flags and double tops to name a few. These entries are rather more subjective than channel breakouts.

Pure prediction

Prediction techniques include Elliott Wave, Gann and Dow Theory. Again the actual entry price based on such theories is very subjective. Predictive techniques usually try to pin point major turning points in markets and are therefore attempting to go against the current trend rather than with it.

Volatility Breakouts

The theory behind a volatility breakout is that if the market makes a sudden move in a particular direction then it is likely to continue in that direction. The general rule is to add/subtract a pre-determined percentage of the recent average true range to the opening price thus giving buy and sell points.

Moving Averages

Take the average price of the last x periods (minutes, hours or days) and buy if the price crosses above and sell if it crosses below. This technique works well in purely trending markets but will be badly whipsawed in a range bound market. Variations include using 2 or more moving averages and using the cross of those as a signal. The moving averages themselves could be simple or weighted (more emphasise on the latest prices).

Oscillators and Stochastics

I.e. RSI, stochastics, Williams %R etc. Generally these tools are used to determine whether the market is 'overbought' and ready to drop or 'oversold' and ready to rise. They work best in range bound markets by picking tops and bottoms but fail in a trending market.

Tim Wreford runs Online Futures Trading, a website that provides information and resources for traders. Tim also provides a free day trading system, the results of which are updated daily on the site.

---

How Do Other Countries Devalue Their Currencies?

Countries devalue their currencies only when they have no other... Read More

What is Forex Trading?

Forex, or Foreign Exchange, is the simultaneous exchange of one... Read More

Trading Timeframes

Long TermLong term traders will work from end of day... Read More

Sending Signals for Trading in Forex

Forex signals are sent by a forex firm to their... Read More

Business and the Forex

The business world is a complex web of supply and... Read More

Forex Broker

A broker is any person or firm that charges a... Read More

Momentum Trading: A Practical Day Trading Strategy to Get Profits from Hot Stocks

Momentum day trading can be extremely profitable when done correctly...Day... Read More

The Yin and the Yang of Markets

I am reading a fantastic book on trading, first published... Read More

6 Critical Factors For Successful Trading

Success in any profession can be broken down into a... Read More

Experience

Throughout our course on futures trading, we have tried to... Read More

How To Control Fear And Greed In Trading

There is an old saying that the market is driven... Read More

Options Trading - Advantages and Disadvantages

What is Options Trading?An option is simply granting someone the... Read More

Choosing A Forex Broker

With currency trading becoming ever more popular, the number of... Read More

Online Futures Trading - Advantages and Disadvantages

What Is Online Futures Trading?A futures contract is an agreement... Read More

Day Trading the Index Futures - How to Judge Good Entries

QUESTION: If the SP futures fall through support and go... Read More

The Secret of Reduced Margin Spreads

One of the best kept secrets in trading is that... Read More

Adaptation to the Realities of the Market

Do you think adaptation to the realities of the market... Read More

Be a Smarter FOREX Currency Trader: Three Basic Principles

Below I will describe three basic principles that may come... Read More

A Short Introduction To FOREX

FOREX is the world's largest and most liquid trading market.... Read More

Forex Broker Involvement Optional

To trade on the forex market, the largest financial market... Read More

How To Handle A String Of Losses

Everybody hates to lose and unfortunately no one is blessed... Read More

Day Trading Course or Day Trading Technique Seminar: Learn Day Trading Education

Profitable day traders recognize that momentum trading is among the... Read More

Forex Currency Trading

It is possible to buy and sell money from different... Read More

Forex Market Overview

"FX" is an abbreviation of "forex" or "foreign exchange." Foreign... Read More

Factors Influencing a Currency Pair Exchange Rate

IntroductionThe exchange rate refers to the value of the US... Read More

Intrenet Marketing VS Forex Currency Trading

Have you noticed that when someone's trying to sell you... Read More

Two Timeless Rules in FOREX Investing

RULE #1) ~ Cut your losers; let your winners ride.One... Read More

Forex Trading Can Be Like Day-trading

Forex trading, or foreign currency trading, has become a bit... Read More

Money Management, Part 2

FEARING LOSSESThere is a huge difference between being risk averse... Read More

Day Trading Success- The Key Is Survival

Most new traders tend to focus just about all their... Read More

Forex2u Forex Strategy On Successful Forex Trading

The essence of the FX2u Forex strategy is that it... Read More

Online Forex

Q1: When you consider that the foreign exchange market has... Read More

The Seven Most Traded Currencies in FOREX.

Currencies are traded in dollar amounts called "lots". One lot... Read More