Strategy for determining entry point 1: Trend channel

Trendlines are the primary tool used by many technical analysis traders to identify trends and support and resistance levels.

The example below, it shows that the market is in an uptrend. This allows traders to determine a strategy to be buying at support and taking profits at resistance based on the trendline. When the price breaks these critical support and resistance levels, traders should then be aware of the possibility of a trend breakout or reversal. As shown in the figure below:

Strategy for determining entry points 2: Candlestick pattern

Candlestick patterns are powerful signals that traders use to find entry points. Patterns like engulfing and shooting stars are often used by traders in trading. In the example below, the hammer candlestick pattern can be viewed as an entry point for a reversal trade on EUR / USD:

Identifying a hammer candlestick pattern or any candlestick pattern does not confirm a trade entry, but only indicates a trading signal. The entry points should be the entry points where the market has a high probability of success. For example, waiting to buy above the maximum price of the bullish signal candlestick, or trade when the next candle should signal the close of,... That will have more confirmation and bring the success rate higher.

As you can see on the chart, the hammer is circled signaling a potential reversal, however, without further confirmation, the failure rate of this candlestick pattern remains high. In the picture above, the entry point is determined after confirming that the next candle closed higher than the hammer candlestick's closing price. Shows a stronger uptrend and confirms a hammer candlestick signal.

Strategy for determining entry point 3: Breakout

Using the breakout as an entry signal is one of the most used trading methods by traders. Breakout trading involves identifying important resistance levels and using these levels as markers to enter a trade.

Knowledge of price action is key to successful breakout trading. The basis of the breakout trade is that the price crosses an obstacle such as a defined support resistance.

The example below shows a critical support level (in red), after which a breakout occurs with increased volume at that point further support for the price move downwards. Your entry point is defined as a close candle outside of that important support. As shown below:

With different trading styles and methods, you will be able to choose how to enter orders in different ways. The above 3 trading strategies have been simplified so that you can grasp how to determine the entry signal.