Decision to enter on a trade at market or to place stop/limit order depends up on our understanding about the movement of price on a particular pair.
I shall briefly explain my discretion to select the type of order.
A. Long/short entry at market.
I used to enter on a long/short trade at market in two different scenarios.
Suppose the price is in an uptrend/downtrend and if I believe the uptrend/downtrend will continue without any obstructions, then I will enter on a long/short trade at market price.
Suppose the price is at a resistance/support area after an uptrend/downtrend and if I believe the price will reverse at this resistance/support and will start a new downtrend/uptrend, then I will enter on a short/long trade at market price.
B. Entering a trade with Buy/Sell limit orders.
I used to enter trades with limit orders subject to the position of price at the time of observation. Suppose the price is in an uptrend/downtrend and if I believe the price will continue it’s uptrend/downtrend up to the nearest resistance/support before reversal, then I used to enter on a short/long trade with a limit order by filling a price at the resistance/support area at where the price is expected to reach before reversal. Normally I used to fill limit entries, if i am not able to sit in front of computer and monitor entries in real time.
C. Entering a trade with Buy/Sell stop orders
This type of orders are preferred during indecision in the market. Suppose the price was in an uptrend/downtrend and presently it is testing a resistance/support area and we are not able to predict the future direction, then I used to enter on trades using stop orders. I may place a Buy/Sell stop order above/below resistance and support areas to catch the future movement. Concept behind this order is that if price moves above/below resistance and support level by a certain quantity of pips, then it will continue it’s movement in the same direction without any interruption.
I am expecting an upward pull back of price for euro pairs before another massive selloff. I am expecting a pull back of EURUSD to 1.2850, EURJPY to 102.20 and EURGBP to range for sometime.
Yes that was very helpful, thanks for the detailed explanation.
Regarding your straddle trades (Item C), let’s say your buy order gets filled… do you immediately close your sell order at the same time? If it is so, then I guess you will avoid these straddle trades when you will be away and not able to watch the charts… correct me if I’m wrong.
I am in a different opinion with Bijoy, I think the EUR is bearish at this time. But that’s just me… don’t take my word for it and draw your lines. It is also good to put yourself in the other person’s shoes… if your bullish on the EUR, which price/area will the sellers be planning to sell?
hi Bijoy and others. I took some time off from trading and the internet and i missed the bounces in friday. And i believe those bounces will continue this week. I closed all my yen positions, tho a bit late, i believe we are about to see a bigger retracement across the market, about 100-200pips maybe. Mostly counting on rallies of yen and usd pairs, which will give better prices to short.
@Bijoy im all tears, seeing how you decided to use 50% and i do agree with the chart you shared above, tho there are few levels to watch before 1.2850 so momentum should say the final word. im pretty sure we will get great opportunities the upcoming week. Ill try to post some good charts i thats ok with you Bijoy. happy pips everyone.
4H chart:
The white area is a place of consolidation and is a Supply zone. Unless this is broken, we cannot consider any long trades. Price is already retesting this and my guess is that it will bounce back down.
Daily chart:
From June 18-20, it is acting as a Supply Zone (Resistance). On Sept 9, it was broken thru then retested and acted as Demand zone (Support). So you can see that price respects this Supply/Demand zone.
EURUSD is in consalidation mode between 1.27-1.29 probably wont break it this week. buy the dip sell the rally.
USDJPY buy below 80 sell above 80
EURAUD retraced exactly 50% and a rally is expected - a big one.
AUDUSD should bounce 1.05~ being top and a nose dive is inevitable. target 1.02 next 1.0.
GBPNZD is a decent buy target above 2.0000
GBPAUD (and most XXXAUD pairs) should rally targeting 1.580 and above.
sorry cant share charts no time but thats current view if you get in when price retraces big gains are ahead. cheers.
Problem with entering with market orders is that you are chasing the market and not letting it come toyou. If you had preplanned the trade and entered at the best time it should never be a market order.
Problem with limit orders is that you’re acting like you can predict where price will go in the future. True you may get it right but I think a much better order to use is a touch-and place stop order method, if you can write a EA that does that it’d be perfect.
Which brings me to stop orders which are really the only type of order you should be using because you are not the bank, not a big shot professional trader who can move the market with market orders and limit orders. You need the market to come to you to prove that it has momentum in your favour before you act on it.
Your success in forex should then depend on which orders you have been using the most
I read your post a few times and it does makes sense. I hope you can give me an example of using stop orders to initiate a position, say in the AUDUSD currently ranging between 1.0350 - 1.0450. Is there an opportunity to apply your stop orders techniques, and if so, where to buy or sell for a high probability that the ‘market’ is coming to me? Thanks for sharing, I appreciate.
You have been doing it all your life. It’s called stop loss.
Just imagine you are in a sell and buy position now, where will you place your stop loss at? That’s where you should be entering the market. Have fun :))
I’m sure you can relate from experience that this is indeed powerful because if you had not use stop loss you would have blown a couple of accounts by now. And the truth is, profit like loss is unlimited in this game. So why not put it to your favour.
oh ofcourse then the next step is to choose those trades that offer a good R:R. forget about trend.
Suppose the market breaks an area, now you can possibly use limit orders to enter at a better price than the stop-order, but the premise must be that prices reach a certain territory that would represent a shift in Demand and supply.
and if we just apply a simple elliot principle: that there is often a retracement before a wave 3 - we take the first leg of a trendline break and enter at the 50% retracement point - you’d be surprised at how often this works and increases your RR.
Once the price touches a certain price level you deem as resistance or support, the EA then initiates a stop order above or below that point so that if the market bounces you’ll enter the trade.
and i do agree with the chart you shared above, tho there are few levels to watch before 1.2850 so momentum should say the final word. im pretty sure we will get great opportunities the upcoming week. Ill try to post some good charts i thats ok with you Bijoy. happy pips everyone.
