It’s important not only to decide and choose an order (buy or sell) to make a profit on Forex, but also to open a deal n time. In other words it is to find the right entry point to the market. The size of your subsequent income depends on the correct definition.
How to determine the entry point
The entry point to the forex market is the place on the chart, which presents itself as the most expedient means in opening deals. Entry points can have not only price parameters, but also temporary ones.
You need to shift attention to a special chart of Forex fluctuations to determine where you put the pending order and wait for the first rollback in the price, which is the opposite of the general direction. In such case the calculation is made that the price will resume and double in price.
The easiest way to determine the entry point is to study the trend movement at different timeframes.
There is a strategy known as “Three Elder Screens”. Its analysis includes a triple graphical analysis: junior, current and senior.
It is necessary to reveal the direction of the price over a longer time interval. Hereupon it is worthwhile to look at the smaller time intervals. On the junior timeframe the entry point will be where the trend began to move together with its direction to the side in a larger time interval.
Fractals for 5-minute charts
You can use the so-called 5-minute timeframe to find out the entry point. Fractals (indicators on the chart, which show the reversal point) will help to determine how far the price can roll back from the main market direction. It is important to wait for the 5-minute indicator in the opposite direction from the market movement on the 30-minutes timeframe. But waiting for such a fractal can be quite a long time, from half an hour to several hours.
The entry points depend on the market direction
These or other instructions are used depending on the direction in which the price moves on the 30-minute timeframe:
- The market is moving down.
- The market is moving up.
Search for a lower fractal: the market is up
When you switch to a 5-minute timeframe, you should put the vertical line on the last chart candle. Now the deal depends only on these data. Next, you need to wait for formations and breakdowns in the lower fractal to find the entry point and enter the market. Before that ignore the upper fractals that will form after with absolute calm. When the breakdown occurs, you can go to the other steps and put a pending order.
Search for the top fractal: the market is moving down
As in the first case, also place a vertical line on the last candle in the chart to find the entry point. Now wait for the formation and breakdowns in the upper fractal, ignoring all the lower ones. Further, if the candle after the vertical line is appeared and the upper fractal is formed, you need to put on its upper part a horizontal line and wait until the price begins to punch it. In the case if another fractal (upper) is formed before the breakdown, you need to wait for its confirmation and move the horizontal line to a new candle. Now wait until the price breaks this line.
To learn and apply these graphics timeframes and all concepts (candles, fractals, etc.) that are associated with them, you need the help of a specialist. Qualified employees of Trading Group will help you to understand all the subtleties of this procedure and teach you all the basics of trading in the Forex market.