Whether you’re looking at short or long-term trading, or anything in between, for that matter, your entries and your exits are the most important parts to the profitable trades you make. With exits being something you can do realtime and choose as the trade progresses, entries are one of the hardest things to get down and enter the market correctly. You can trade like Shawn Lucas with a plethora of entries and capture many small profits at the same time or you can trade longer term where a more ideal entry can help cover losses or result in a minimal gain.
If you’re more of a scalper and rely on those large quantities smaller profits, the one and five-minute charts are your best charts to determine entries. Scalping trades do not rely on specific indicators typically. Sometimes, an SMA or other moving average will be used but scalping uses mostly chart reading and pattern recognition. If you use Shawn Lucas’ Wobble Technique, your entries will bank off of the current movements and momentum in the market and creating hedges to offset open losses and have pre-setup positions for when the momentum shifts, creating another trade to profit off of.
For more day trading type strategies, there are three main methods for entering the trade in an ideal spot. First type is typically done with indicators. The indicators will crossover each other, crossover a line on the indicator, or any other series of possibilities that can occur with indicators. A secondary method for entry can be chart reading from pennants, consolidations, head and shoulders, and more. A tertiary method, concerned with more of this topic, ‘Charts That Can Help Determine Entries’. This is an alignment strategy. This setup is a method involving having the time frame you would typically trade and then going to smaller and sometimes larger time frames to find idealized entries on smaller time frames. From those entries, the trade is less likely to go against the trader as far since you chose the ideal entry from a smaller time frame for an overall longer trade.
Then finally, there are long-term trades. Long-term trading has advantages similar to the day trade strategies. The same entry types can be looked at as the patterns that present themselves are very similar. With longer term trading, an important distinction to account for is the fact that there are many unpredictable factors that do not present themselves with day trading. Monitoring news events as they become scheduled in the coming weeks and watching out for non scheduled releases and how they affect your trading.
Trading is a numbers game. The numbers of the exchange rates to be literal. The numbers of trades being pushed through and the differences of the take profit/stop losses with the entries as well. High-quantity trades being a more Shawn Lucas approach and the numbers are trades being pushed through or you take a longer term approach and the numbers are the distance from open to close. No matter the numbers you choose, the charts that you trade and use are important. Make sure your charts are part of your plan. The right charts will make all the difference in your trading as long as they are used correctly.