Realjosh254
New Member
Regardless of the type of trading strategies and market environment you seek to trade, the methods of establishing an entry point in the market can be classified or grouped together into 3 different categories. Here are the groups and classification of entries:
1.) The 1st group: choosing levels/level picking, which is an early entry.
2.) The 2nd group: confirmation signals, which is waiting for proof of price respecting a level
3.) The 3rd group: momentum entries, which is waiting for a breakout of a certain area/level
Here are some examples for all of the situations above:
1) I would qualify an entry based upon the Fibonacci retracement tool as level picking because a trader is expecting the price to turn at that exact spot. The trader has the anticipation of a turn without any current evidence for that. The trader might, of course, have historical evidence that the entry methodology has proven to be successful but every new entry still remains to be seen.
2) A confirmation signal entry would be one when a trader uses the Fibonacci retracement but this time around only takes an entry when they see a candlestick formation taking place which confirms the fact that price is respecting that Fib level.
3) A momentum entry is when a Forex trader is waiting for a break of a (key) level. These entries are always waiting for the price to go through a tool drawn on the charts, such as a trend line. These traders are also called breakout traders.
1.) The 1st group: choosing levels/level picking, which is an early entry.
2.) The 2nd group: confirmation signals, which is waiting for proof of price respecting a level
3.) The 3rd group: momentum entries, which is waiting for a breakout of a certain area/level
Here are some examples for all of the situations above:
1) I would qualify an entry based upon the Fibonacci retracement tool as level picking because a trader is expecting the price to turn at that exact spot. The trader has the anticipation of a turn without any current evidence for that. The trader might, of course, have historical evidence that the entry methodology has proven to be successful but every new entry still remains to be seen.
2) A confirmation signal entry would be one when a trader uses the Fibonacci retracement but this time around only takes an entry when they see a candlestick formation taking place which confirms the fact that price is respecting that Fib level.
3) A momentum entry is when a Forex trader is waiting for a break of a (key) level. These entries are always waiting for the price to go through a tool drawn on the charts, such as a trend line. These traders are also called breakout traders.
