How do you determine a good entry point for a trade, and what signals indicate it’s time to close the position?
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There are multiple ways to determine entry. A useful principle is when you can see from your TA that price is more probably going to go in a given direction. Secondary to this is that the price move will probably start soon (or continue to move ) and should hopefully be significantly large. At this point, it’s helpful to be able to see some TA which suggests a rational price level where you can set a stop-loss order.
Exit points are more difficult.
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Wow!!! Thanks Tommor! What TA do you think is essential for beginner to master, before one actually place a trade?
this differs from strategy to strategy and you should find your own!
A good entry point usually forms where price aligns with your strategy’s key conditions such as trend direction, support or resistance, and confirmation from indicators or price action. For example, entering near a support level in an uptrend after a bullish candle or breakout confirmation gives a high probability setup.
A trade is closed when the target is reached, the stop loss is hit, or price shows signs of reversal like loss of momentum or opposite structure breaks. Some traders also exit when indicators show divergence or when volume drops sharply. The best entries and exits come from following a clear plan instead of reacting to emotion or short term noise.
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I could sum it up in two words - price action.
Maybe a few more words.
There are two approaches to learning a new subject - there is the old-fashioned school or academic approach - learn everything from a top-down source, from A to Z, everything is important, you must know everything which everybody else knows
There is then the real-world approach - this is how you’re forced to approach learning when you get into a job and suddenly a business challenge arises and you are delegated to investgate and come up with a response. Pretty damn quick.
The starting point is to identify what are the key problems to be solved. Find the answers to these. Test the solutions. If they work, start using them.
We all already prefer and use the real-world approach. Remember the last time you arrived somewhere not speaking the local language and you needed e.g. a hotel room? Did you enrol on a 12-month Beginner’s Language Course, or did you find a translation for the phrase “I would like a hotel room please”?
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There are as many angles to your questions as there different faces. This is due to the fact that different traders employ different trading methods hence different entry and exit techniques.
A popular entry signal is the 50% fibonacci retracement, and exit is the 161.8% or even 400% fibonacci extension in a dominant trend.
There is the entry and exit trading method using either the daily pivot or weekly pivot of the calculated support and resistance levels.
There is also the engulfing concept with entry at current market price (cmp) at trade control which means having an engulfing bar on a lower time frame within a higher time frame’s engulfing bar zone. Exit is at the higher time frame’s roadblock which is the entry time frame’s and higher time frame’s engulfing zone in the opposite direction of the entry.
There is the supply and demand concept where entry is at one zone and exit is at the other zone.
There is the price action break and retest entry method. Exit is at the nearest high or low depending on the direction of your entry.
There are tens of thousands of entry and exit methods, or more.
The thing is if entry and exit methods was all there is to be successful everyone would be mega rich. This doesn’t save you the need to put in the work, and time in the charts. You need to find the method that suits your personality as a trader. That is when you should research and refine your entry and exit methods if you want to make any progress in trading.
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if a "good entry point " end up losing ,is it still a good entry point ?
you just pick an entry point you believed in ,and accpet whatever the outcome is,thats the whole point.exit point? same as well
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