Home Trading Strategies Forex Entry: Should You Wait for Confirmation?

Forex Entry: Should You Wait for Confirmation?

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Forex Entry: Should You Wait for Confirmation?

hey hey what’s up my friend so in today’s video it’s about Forex conformation limit versus stop order so I’ve got a question from big rotten apple alright do you personally enter your traits we have a limit order or wait for a confirmation and use a stop order to enter so the straightforward answer is yes and no and let me explain why so firstly let’s talk about limit order what is a limit order so for those of you who are unaware let me just briefly run through what’s a limit order let’s say the market is in a range okay and it bounced off support and right now it’s at this middle of the range and let’s say maybe you want to be buying and support you wanna buy support but now you have missed the first part of the move market has rallied up higher and you’d want to be entering over here so what you can do is to put in a buy limit order at support this means if the price reverse down lower you would get field right on your trade because it’s a buy limit order your entry and the cheaper price at a more favorable price okay the downside to using limit order is that you may not get filled because the market may just continue higher and your limit or the kind of seats here till you know the end of time okay so that is pretty much what a limit order is and the way I use it is that I set limit order on my traits when I miss a trading setup and at the same time write the pattern is still not invalidated so let me explain to you what I mean by this so firstly right let’s have a look at this let’s say it’s a child of Bitcoin let’s say no there is this breakdown over here okay the price it broke down lower okay let’s say is trading over here and clearly I miss the breakdown at this area of support over here so what I could do is I could use a limit order a sell limit order so what I could do is to put in a sell limit order over here so if the market let’s say if it does retrace up higher let’s assume right if the market some house right it does retrace up higher I’m gonna get filled on this sell limit order okay we’re not gonna talk about stop-loss and stuff like that because that is irrelevant for now so you can see this is where I use a sell em in order to get into the trade flow for example I missed the first part of the move so recall earlier I say the in other would be there until the trading setup is invalidated so not a question to ask yourself is you know at what point would the trade be invalidated so this really boils down to you write your trading strategy and what point would you exit the trade and what point you know where you know there’s no reason for you to stay in the trade any longer so let’s kick things simple let’s say for example for me this trading setup let’s say the trade will be invalidated if the previous candle breaks and close above the previous candle high so you can see over here okay in this case this candle over here right it broke and closed this candle break and closed above the previous candle high so that could be a form of invalidation for you maybe you know if that happens right then hey you know your so-called trailing stop losses hid right so that’s a possibility right – Trillian stop-loss using the previous candle high so let’s say you know you miss the move the market hit down lower over here you’ll sell them in order it’s over here so as long as the price did not break and closed above the previous candle I high your sell limit order would still be here okay only when the setup is invalidated or only when you’re trailing stop losses heat right meaning over this candle let’s assume that you’re drilling your stop-loss you know using the previous candle high this candle in break and close above the previous candle high only then you remove this cell limb in order over here okay until it gets invalidated however you want to define invalidation for your trading setup it could be a 20-period moving average it could be the previous candle high or low it could be you know whatever you wish – so this is just an example of what I mean by you know I’ll use a limit order I’ll put it there until the trading setup gets invalidated okay so you can see over here I removed the other when the setup is invalidated and how it’s invalidated it’s up to you to define it so what I’ve said earlier with you earlier is you know trailing and stop-loss using the previous candle high or low you can use the 20 ma you can use a trendline you know it’s stuff like that so also right when I use limit order I don’t have blindly I don’t blindly put limit orders in the market so for example let’s say you know I know this that this is a market is a range okay I won’t just blindly pack a limit order at this level just because it’s an area of support what I would like to see is like the price comes in first or I get a of price rejection and clothes higher then only there in this movie so confirm right or you know there’s a valid entry trigger for me to enter the trade only then right what I want to buy okay so I don’t put blindly place limiting orders on a chart that’s that’s not how I trick there are traders who do it who are successful with it right before me my preference is to always let the market show signs of reversal first and then get them bought the move so that’s how I use a limit order I suppose stop order I let me explain how I do this right so for stop order it’s pretty much the opposite let’s say the market is in a range okay then it starts to consolidate and you notice that there’s this like resistance or consolidation over here so what you can do is you can place a buy stop order above the high so if the market trades above the highest right automatically you get into the tree that’s what we mean by a buy stop order placing an order above a market structure a reference point right where if the price hits that level you’ll automatically be in the tree so when you use a stop order at your entering your traits with momentum and you’re back right but the downside to this city is that it might be a false breaker okay but you’re guaranteed right to always be part of the move right when you use a stop order of course there might be sleepiness and stuff like that right but your you will be guaranteed right to enter the trip because the moment the price hits their level right the it would send an order to the broker or whatever you are trading with right to say that you want to be buy right now since the price has really triggered your stop order so how I do it is again right is usually for trading breakouts so when the price is near the breakout level and after build up is form right and if the price is very near a breakout level I tend to just put in a stop order over there okay however if the price is far from the breakout level I don’t have my stop orders and it so let me explain again what I mean by this so one example is let’s say crude oil okay so you look at crude oil you can see that over here okay notice that this is a there is this a you know a trend continuation trip over here I like a bull flag over here and notice right when this candle closed it clothes right pretty much near the hikes this can do so there’s a good chance right now mix candle could be a strong bit ghoulish close above this highs over here and it’s not wrong to wait for the clothes you can’t wait for the clothes to a few no further confirmation but there’s a good chance that the market might close pretty far away from this breakout level and you would have to enter edit even higher price so this is when I would you know use a buy stop order to just put it just above this highs over here because there’s a good chance that if the market breaks out and if I wait for the clothes I’ll be entering at a much unfavorable price a more unfavorable price so this is where I just use a stop order above the highest especially after a build-up has been formed right and he said this you know this key resistance or swing high however you want to call it okay when I don’t use a stop order right as mentioned is when the price is far from the breakout level so again let me explain what I mean by this so you can see that for example okay let’s see if I can find one I think this one okay so you can see over here let’s say you know the market right uptrend right consolidate about here right now the prices over here so you can see that from this closing price okay from this closing price which is here okay to this breakout level the distance is pretty much right the market right needs to move this much all the way up to this highs right before the break up could occur so really when I see that the distance is very far away I won’t put a buy stop order above this size I want a distance to be near because when the distance is very far away what could happen is that the market move too much it moves too much too soon hit the highs and then you know it reversed down lower and end up being a false brick setup so usually I don’t put a stop order right when the distance is too far because if the market moves too fast too soon right it tends to exhaust itself and you know have a sign of reversal so this is where I don’t put a stop order above this highs over here because the distance from this close to this height is too far where as you compare earlier right to the crude oil on this one over here you see the distance is much nearer this one here right the distance of this highs this sorry disclosing price to the highest is so much nearer so this one over here right I’ll be more inclined to put in a stop order okay because if I know if I wait for a close right there’s a good chance that he’s gonna close pretty far away and I’ll be entry and a very unfavorable or at a higher price to pay okay so this is what I mean by I don’t have stop others if the price is far from the breakout level so back to the question right where you see a limb from rotten apple okay do you personally enter traits we’ve limited or wait for confirmation and use a stop order my answer is a yes and no to both of them right that’s what I’m just explained right earlier okay so let’s do a quick recap right so I use a limit order right when we when I miss a trading setup and that setup is not invalidated so for example let’s say I trade breakouts I missed a breakout trade and for my breakout traits let’s say I really trill it using the previous day low so for a long breakout rates right I would hold on to the breakout traits until the price breaks and close below the previous day low so let’s say I miss the trade okay and the price is not breaking close below the previous stay low I’ll put in a buy limit order so maybe there’s a sudden spike down I could still get feel on the trip however if the price if the market breaks and closed below the previous day low okay that means my trailing stop loss is it that means my trading said I was invalidated and I’ll exit the trade so if that happens right and my buy limit order I still not feel I would remove the buy limit order because now my trade is invalidated and remember your trade in validation it is it depends on you on how you want to classify in validation could be a trailing stop loss it could be moving every she could be a trendline you know or maybe it hits your original take profit level right that could be ways right to define that hey your trading the setup is invalidated okay so this is a what I mean by I use it when I miss a trading setup and a pattern is still not invalidated for stop order I really use the order when the price is near the breakout level and a buildup has been for the reason I do it is because when the price is very near the break out level and there is built up being foam right there’s a good chance that the breakout could be strong and Swift so if I were to wait for a close right I might be entering at a much higher price so I just have a buy stop order above the highs so I would get into the trigger at the moment the price traits at the breakout level or beyond the breakout level however I don’t do it right if the price is far away from the breakout level reason being is that if the price is very far from the breakout level and let’s say there’s a sudden huge spike that breaks out chances are the breakout tends to fill because the prices move too fast too soon right and morph didn’t notice it’s likely to be a false breakout and I’d want to be you know packing a stop order at that highs only to you know have a good chance of it being a false breakout so I only use the stop order when the price is very near the breakout level and there’s a very nice tight build build up being from then I’ll just put in a stop order over there right to get to get the best possible entry on the breakout okay so this is a how I use limit and stop orders I hope that answers your question rotten apple and for those of you who still have questions for me you want me to answer leave it in the comment section below I’ll read every one of them and I’ll do my best to help and by the way before you go right hit that thumbs up button and subscribe to my youtube channel this way whenever I publish a new training video right you’ll always be updated and you’ll never miss a thing again alright so with that said I wish you good luck and good trading I’ll talk to you soon you

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