TipsFor Picking Forex Day Trading Entries

TipsFor Picking Forex Day Trading Entries

Whatever security you’re investing in, you always have to keep in mind that buying low and selling high is a rule to follow. This is also true for simple purchases like buying cars, phones, clothes, and others. However, when you make an Online Investment to trade forex with the trend, you may find yourself buying much higher, or almost at the top of the range. When your entry price is well above the support level, you take on much more risk on your trade.  Online Trading Review offer some useful tips for picking forex day trading entries.

Before that, let’s illustrate why you need such tips. If your trade moves against you, the price will have much farther to fall and will have to consume more time to get to the profit zone. You may find yourself jumping into a rapidly moving market thinking that you will miss potential gains even if the price already moved to asubstantial distance from a good entry point. You may end up losing the pips you wanted to gain. How do we fix this?

Trade in the strongest currency pairs

When you trade with the trend, you will look for the best low risk entries with the highest profit potential. You have to look for higher swing highs and higher swing lows. Keep in mind that they should move with a pattern resembling that of a stair. Then, you draw a trend line connecting the swing lows from the lower left hand side of the chart toward the chart’s upper right hand side.

The Trend is up? Try to buy near the trend line. Use Stochastics!

The closer you buy to the trend line, the lower the risk you can incur. When you buy near or at the trend line, you can strategically place a stop a few pips below the swing low. Remember that you increase your risk and decrease the amount of pips when you chase the market and allow price to move too many pips from support. It’s ideal to use Stochastics oscillator to pinpoint entries. This is because when Stochastics fall down below 20 and climb back above it, you can get a buy signal that confirms the price action rebound from the trend line.

Book profits at least twice the amount you have at risk

The market moves in waves, not a straight line, so you want to take profits at the peaks on the range. So you should take profit just above the previous price high of the trend during an uptrend. Moreover, if you are short or trading in a downtrend, you may aim to take profits just under the previous price low.

Stay back when pairs reverse or move into a range

Usually, currency pairs range. Now, if the trend turns out to be unclear, you may want to look at other pairs to seek trading opportunities. If you trade only a couple of currencies and both have no clear trend, then you ought to change up your strategies and use range trading ones.

Final Word

As a forex trader, you should enter trades that are in the direction of the trend on strongest pairs. You can use Slow Stochastic indicator, and throw a combination of trendlines in the mix. You should also avoid pairs with blurry price action so that you can diminish account exposure.

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