Post by traderAllen on Jun 22, 2015 11:29:16 GMT -5
When you are looking to enter a trade you always start with the bigger picture. If you are looking over the chart you should have already determined that the currency pair is likely to move higher, once you have determined that the pair is likely to move higher then you start looking for a low risk entry point. I used primarily FPAS, but it doesn't matter whatever method you choose to determine your entry should be focused on low risk, therefore in your mind you should be telling yourself this currency pair is moving higher, And you should know this with some degree of confidence through your ability to read the price action. If you are not confident in the direction than you do not place a trade. We are not always right and that's why we look for the low risk setups.
The same goes for the short side. If a currency pair is moving lower, as your looking at the chart, and you have determined that there is no near-term support, you now look for the low risk short entry. But you must complete the first step first. If you cannot see a clear path to the downside, you do not place the trade.
Then you cannot forget the nature of 4X and the spreads if you're looking for a 10 PIP profit the currency pair is going to have to move at a minimum of 12 pips.If you're getting in on a pullback type entry you'll have to start locking in pips sooner because that first level of support which started the pullback may just turn out to be a double bottom. Therefore to gain a 10 pips profit the pullback would probably have to be more than 13 to 14 pips. This is important to understand because it's why most pullback traders lose. If you're looking to get in on a first break or second break set up you need to make sure that your trade has room to get you a profit whether it's two pips or 10 pips before it reaches that first line of near-term support or resistance.
The same goes for the short side. If a currency pair is moving lower, as your looking at the chart, and you have determined that there is no near-term support, you now look for the low risk short entry. But you must complete the first step first. If you cannot see a clear path to the downside, you do not place the trade.
Then you cannot forget the nature of 4X and the spreads if you're looking for a 10 PIP profit the currency pair is going to have to move at a minimum of 12 pips.If you're getting in on a pullback type entry you'll have to start locking in pips sooner because that first level of support which started the pullback may just turn out to be a double bottom. Therefore to gain a 10 pips profit the pullback would probably have to be more than 13 to 14 pips. This is important to understand because it's why most pullback traders lose. If you're looking to get in on a first break or second break set up you need to make sure that your trade has room to get you a profit whether it's two pips or 10 pips before it reaches that first line of near-term support or resistance.