Download - Trade Triggers & Trade Entry Importance
![Page 1: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/1.jpg)
Trade Triggers & The Importance Of Trade Entry http://www.netpicks.com/look-before-you-leap/
![Page 2: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/2.jpg)
Imagine for a moment that you have plotted out a trading zone on your chart and that is the area you will need to see
price visit before entering a position. Maybe it's a confluence of factors such as price pivots, a moving average, measured
pullback via Fibonacci and a round number. What do you need next?
![Page 3: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/3.jpg)
You need something called a trade trigger to get you into the position.
When price gets to an area of interest, you don't simply jump into a position
without some type of sign that the price is moving in your direction.
![Page 4: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/4.jpg)
Looking at this next chart, we have a confluence of technical factors that include:
A. Former resistance area broken & is a Fibonacci cluster zone B. Pivot level plus large momentum C. Pullback to a moving average D. Not seen but also a '50 level
![Page 5: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/5.jpg)
![Page 6: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/6.jpg)
If you were just waiting for price to enter your confluence zone to enter the trade and not a trade trigger, you
can see you were taken out with momentum
![Page 7: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/7.jpg)
Another positive about waiting for a trade trigger is you won't just "jump in" to a large bear or bull candle by
letting emotions take over. Not only can these candles signify an temporary
exhaustion in the move but you can also get some large slippage as you
market entry into the trade.
![Page 8: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/8.jpg)
If emotionally entering a trade because you see a large candle (yes,
people do that), then you clearly don't have a trading plan and first order of
business: Get a trading plan!
![Page 9: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/9.jpg)
![Page 10: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/10.jpg)
So we need some type of trade trigger to get us into the trade in an objective
manner that shows, at least at the point of trigger, that price is in our
direction.
![Page 11: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/11.jpg)
I am going to look at three methods to enter your trade and for all the
examples, I am going to use the same chart as the last one you just saw.
These may not be how the textbooks describe them but often times there is a large discrepancy between trading
books and in the field usage.
![Page 12: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/12.jpg)
I am a fan of market structure in trading and not only can it signify
areas of interest but also are valuable for trade entries.
![Page 13: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/13.jpg)
Understand that price moves in waves and in our sample chart, our uptrend needs higher highs and higher lows to
remain intact. A down trend would need lower highs and lower lows to
stay intact
![Page 14: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/14.jpg)
It would make sense to use the last swing high as a reference point to
enter the trade. One price breaches the high after price hits your zone, you
could enter the trade.
![Page 15: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/15.jpg)
![Page 16: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/16.jpg)
The issue now becomes position size and risk because it is a large distance between our zone and the high of the
last swing.
![Page 17: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/17.jpg)
There is a trade-off between confirmation of the move and your
stop placement which could leave you with a trade with a very small position size if you are using a % of account risk
method.
![Page 18: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/18.jpg)
You can see however that there was not a trade trigger and you would not
have suffered a loss on this trade.
![Page 19: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/19.jpg)
A very objective method of trade triggers is using an indicator cross or
turn to alert you to entering the trade. How close you are entering at the turn
will depend on the indicator and setting you are using.
![Page 20: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/20.jpg)
This is a 14 period CCI that we can use for a trade trigger. There are a few
methods you can use to give yourself an objective trade entry when price
enters your trading zone.
![Page 21: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/21.jpg)
1. This is where the long shadow shows up and drawing a simple trend line on the highs of the down slopping
CCI does not give you a trend line break and therefore no trade.
![Page 22: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/22.jpg)
2. Price gives a slight bounce off the zero line but price never makes it high
enough to trigger a trade
![Page 23: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/23.jpg)
Waiting for a simple CCI signal would have prevented you from entering a
trade after a tempting reversal candle at your trading zone of interest.
![Page 24: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/24.jpg)
To add a little more confirmation, you may want to place a buy or sell stop a few ticks/pips off the low/high of the candles that turns the CCI. This will ensure actual price movement is in
your direction although the breach of a high or low of a single candle does
not hold much significance.
![Page 25: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/25.jpg)
Trend lines are used by many traders to help define trend direction and
even trend strength through the use of fanning trend lines. The way you use them to define the main trend is also
how you can use them to show a break of the counter trend move or
retracement.
![Page 26: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/26.jpg)
The chart we have been using makes it difficult to use a trend line at this point
because you want to connect swings and there are no swings to speak of at
this point.
![Page 27: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/27.jpg)
![Page 28: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/28.jpg)
There is another way to draw trend lines and that is simply having the line
hug the shadows or extreme of the body candle range.
![Page 29: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/29.jpg)
The black trend line is an example of just connecting the upper shadows and entering the trade on a strong
break of the line.
![Page 30: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/30.jpg)
The solid red trend line is plotting off the highs and the dashed red is an
attempt to join the high with a sloppy swing high.
Regardless of the reds you used, there was not a trigger when price entered
the trading zone.
![Page 31: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/31.jpg)
Nothing is guaranteed but having an objective means to enter a trade keeps all emotions out the trading equation
and that is a huge step for many traders.
![Page 32: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/32.jpg)
When trend lines break, there is often a retest of the lines and that can cause
many traders to panic out.
![Page 33: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/33.jpg)
Support/resistance can be arbitrary and often times we will see price test (break the high), fail, and then drop
after you are in the trade.
![Page 34: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/34.jpg)
CCI is one step removed from current price as it needs price to calculate.
![Page 35: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/35.jpg)
In the end, what really matters is that whatever you use is something you are
comfortable with and will be consistent with. There are many ways
to swim a river and the same is true for trading: There is no one right way
to trade.
![Page 36: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/36.jpg)
This objective way to enter trades takes emotions out of the equation and further cements an objective
trading style where your rules do what they are designed to do.
![Page 37: Trade Triggers & Trade Entry Importance](https://reader034.vdocuments.site/reader034/viewer/2022042522/55ccb643bb61eb242e8b47e4/html5/thumbnails/37.jpg)