MAKING A PERFECT ENTRY...

Just had a chat with one of my trading colleague yesterday and he asked one simple question that has always been asked...

HOW DO I MAKE A PERFECT ENTRY?

Simple on the wordings but definitely not on the execution. Anyway I did write previously on this topic "MASTERING THE PERFECT ENTRY SKILLS" but this time I will focus more on answering this one question straight away...

Here are my answers...

1. 1st of all, no one can never know exactly whether he or she will make a perfect entry or not... no one... and I'm very sure about this.

2. Base on my analysis, professional and institutional traders plan their entry base on certain set of rules & setups from both their technical and fundamental analysis of the market. Nevertheless, most of them are more inclined to technical analysis like the exponential moving averages, Fibonacci levels, previous supports and resistances, as well as Elliot Wave Theories... to name a few.

3. Entry rules are created base on self-fulfilling prophecy in which at certain levels of price action, buyers and sellers will act accordingly to what they believe. Majority will win... simple.

4. Do not take the daily Economic News for granted especially on the timing. They are indeed the market movers where traders and banks are in putting their trades accordingly to the sentiment generated from that news. The safest way is to enter 15 minutes after the news, when the market is clear on its intention. Though news effect are usually faded during any strong trend, but the volatility effect of its spikes could be catastrophic to your account.

5. Timing is everything. Watch the clock every time you feel like entering the market. I would highly recommend you to enter the market during London Session only using the 15 minutes to 1 hour interval time frames. Anything smaller than 15 minutes are not recommended.

6. Most position traders do even put their trade right after New York close each day (5am local time here) or create pending orders (ie OCO orders) base on previous day high and low. This is especially effective in a strongly trend and breakouts market conditions.

7. Something that I read from Trade2Win.com, it's not a matter of getting a good entry or not, it's a matter of holding a good position and pulling out immediately from a bad trade that counts.

8. The real guardians to your account is the money management rules that you apply when positioning your trade in the market. You must know sort of risks that you are facing upfront so that in case you're wrong, you knew exactly what will happen.

9. Make your own analysis and act accordingly to what you see, especially the price actions, not on what you hear. Of course, you need to learn and gain certain experience before you can start doing this.

10. Always remember, we are the small fishermen in this forex world so don't ever thought that our tiny orders would ever move the market, coz it won't. It's the overall influx of market orders, especially the big boys who make all the difference that we plan to take advantage of. That is why it is best to stay out during thin market condition, especially during the Asian Session.

11. Most importantly, control yourself. That's how most good entries are made of. Don't be too brave or too fear in making any trade decision. You are in full control if you can control yourself. In fact, this is how you can actually gain the best lesson from this trading arena, in which super-traders continuously gain their long-life trading experience by actually learning on how to control themselves. For sure you will know yourself better, who you are in reality when dealing with real money once you start trading live. Try it and you'll see! It's fun getting to know yourself better coz otherwise you wouldn't know... as this is one of the most prominent lesson from trading.

To conclude my answers, there are hundreds of books and articles written about this topic alone, promoting such and such system that claimed to be fool-proof etc etc. Don't get caught in such gimmicks since the most important element that you have to master in making good entries is no other than yourself. I'm sure if you're a trader you would agree with me 100%.

Nevertheless, what I have written above are the points that I believe the most important from my own view and perspective.

Imagine this...

Just like a good pilot who has flew safely for more than 20 years, it's a matter of his good flying practice and habits that keep him on the air longer than any other pilots, regardless of how bad the weather and technical difficulties that he may had encountered along the way.

Compared this to trading, there is no one point that is more important than the others since it is the collective amount of good habits and techniques that you apply that would contribute towards the overall success for you as a trader.