Finding The Correct Trade Entry Point
In today forex faq, we have a question from one of our fellow traders and he is asking me the below question
How to read the market trend using chart and decide the correct entry point.
First of all, let us go through how to read the market trend. In fact, I have written an article on various trend indicators some time back and you can read it below.
In this article, I will show you how to identify a strong trend by using several EMAs.
As for how to find the correct entry point, You can make use of support and resistance like the Fibonacci levels or pivot point level. When the price hits a major support or resistance levels, you can then enter a trade based on the repulsion of it as the price will usually respect major S & R levels.
In addition, you can make use of indicators like the stochastic indicator or parabolic SAR to make your entry. As the stochastic indicator can be used to tell you whether the market is overbought or oversold, you can strengthen your strategy by adding this indicator to your S & R levels.
When you see the price approaching a major support and the stochastic indicator showing oversold market, this will give you a good entry point.
Similarly, when the price hits a major resistance plus the stochastic indicator showing overbought market, you can also enter a good trade.
I hope that I have answered your question and do feel free to give your comment below.