Sunday, September 24, 2017

Finding The Correct Trade Entry Point

April 30, 2012 by  
Filed under Forex FAQ & Latest Post


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.

To find out more about the stochastic indicator and the parabolic SAR, you can read my previous blog post from the links above.

I hope that I have answered your question and do feel free to give your comment below.

Comments

2 Responses to “Finding The Correct Trade Entry Point”
  1. chris zdanowicz says:

    finding the correct entry point was a issue for me as you could get in to earley or to late but using bill williams fractals and finding the surport levels i place the trade 5 pips below it just keeps me out of the noise of the market and when you get a brake it tends to be a strong move.other thing is if trading eur/usd look to usd/chf as they will always move oposite to each other i am sure kelvin will explain that and why that is dollar index included.also the non lag zig zag and zig zag pointer indicaters give you a clue for market reversal so you dont have to be sat at the screen all the time.i have put this into practise now on demo for last two 10 days and won 6 out of 9 trades.the 3 winning trades two where whips for a few pips and a 18 pip loss.total pips won 135 lost.best trade set up was this morning placed yesterday at 14.00 on eur/usd sell at 0.05 a pip 1.32371 closed at 1.31442 for 930ish points or £46.45 on demo.

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