Whether you are a new or long-term participant in the Forex market, you surely know and understand the importance of entry points.To get more news about Forex Trading Tip, you can visit wikifx.com official website.
By waiting for a better entry point, it allows you to have a “tighter” (shorter) stop-loss and to increase the risk/reward ratio (earn more). You can trade with larger lots without risking more than the amount of your acceptable stop-loss.
You can reduce the risk of an order hitting the stop-loss. Because your stop-loss point now locates in a safer position (because the entry point is better). Your order will have more “breathing space”.
But many traders think this is the easy part of trading. They pay little attention to how to get the best Forex entry points (do you？).
In todays article, I want to share with you how we can get the best entry point. From there, you can improve your skills and the amount of money in your account.
Use limit orders in Forex to get better entry points
A pending order is an order you have executed but it has not yet appeared in the market. You can set your own matching price (higher or lower than the current price).
The pending order gives you additional power, which is choosing the exact price as you desire. Pending orders do not always match. And you may (sometimes) miss an opportunity with just a few pips. However, with matched orders, obviously, you have a better entry point. The stop-loss is also much better.
Your risk/reward ratio also gets better. You can always get a profit ratio of 2R or greater if a pending order is matched. Notes: Pending orders allow you to let the market “serve you” and match your desired price. You need to be mentally prepared that it may waste a few (or more) opportunities. However, with a much better and greater risk/reward ratio and stop-loss, the pending order is a great companion.
If you‘ve ever read my articles, this is what I’ve been talking about many times and in detail. I will point out the main points below.
Analyze the market and manage orders when the New York session closes. This is an easy and effective way to increase the quality of every entered order. You dont need to stay up all night. Feel free to sleep a good night and when you wake up is the best time for you to turn on the computer and observe the market.
The daily chart (D1) provides more meaning and “credibility” than charts at lower time frames. Completely focusing on this chart helps you get better and more accurate Forex entry points.
Signals based on daily charts are more “real”. The market always floats with random fluctuations in a narrow range. In low time frames, you are more likely to get “seasick”. This makes you not get a good idea when the price goes up a bit and then goes down a bit.
Notes: Low time frames here are the ones below H1, for example, M30, M15. In my opinion, you should limit using H1. H4 is also good to use. And you should use D1 as the main time frame. Just focus on it.