The Entry
To me, entering a trade is the scariest part. After that, I’m in Ms. Market’s hands. But we have to enter to win, so how to go about it ?
There are many ways to enter, but “oh hell, just buy it because it’s going up” is not usually one of the better ones (ask me how I know this, lol). As Helene Meisler often says, if it looks great, it’s too late.
I think it boils down to two primary types of entries :
1) Passive. In this mode, you’re bidding at support or offering at resistance. Hopefully, price will fill you and then reverse. (“hope” is not my favorite word in trading)
2) Active. Here, you’re waiting for price to move a bit in the desired direction and then entering with a market or stop order.
Maybe a better description would be “without confirmation” and “with confirmation”. The confirmation might be taking out a prior bar’s high or low, or breaking out of some consolidation.
Lately, I’ve become more fond of the active or “with confirmation” approach. With this method, the market at least tried to move in my direction. Too many times I have gotten filled on a low bid or high offer, only to see the market keep running …. right over me.
So, I think the active method has two main advantages :
1) I won’t miss the trade because price never hit my limit. If it moves in my direction, I get triggered in.
2) If it keeps going in the “wrong” direction, I won’t even be in the trade. It can run over somebody else, not me.
There are many ways to enter, but “oh hell, just buy it because it’s going up” is not usually one of the better ones (ask me how I know this, lol). As Helene Meisler often says, if it looks great, it’s too late.
I think it boils down to two primary types of entries :
1) Passive. In this mode, you’re bidding at support or offering at resistance. Hopefully, price will fill you and then reverse. (“hope” is not my favorite word in trading)
2) Active. Here, you’re waiting for price to move a bit in the desired direction and then entering with a market or stop order.
Maybe a better description would be “without confirmation” and “with confirmation”. The confirmation might be taking out a prior bar’s high or low, or breaking out of some consolidation.
Lately, I’ve become more fond of the active or “with confirmation” approach. With this method, the market at least tried to move in my direction. Too many times I have gotten filled on a low bid or high offer, only to see the market keep running …. right over me.
So, I think the active method has two main advantages :
1) I won’t miss the trade because price never hit my limit. If it moves in my direction, I get triggered in.
2) If it keeps going in the “wrong” direction, I won’t even be in the trade. It can run over somebody else, not me.