Recognizing a good entry point is the first step in achieving a successful trade. Entry point is the price at which an investor buy/sell an asset. And exit point is the price at which an investor exit from trade with profit or loss. Money management and determination of entry/exit points is the two half of trading like the two sides of a coin. The trader community has been extensively examined entry points with divergence/convergence phenomenon, but exit point has not received much attention because of its complication tendency. But inconsistencies which appear between price and everything else complicate trade timing. So to reduce the degree of uncertainty from our trades exclude price from all the calculations made. But it is not possible, since price is the only profit and loss determinant in our trades. Your success or failure as a trader depends on your trade entries. One fault entry break your month in the market but a good entry will make your month in the market. Using better stop loss placement decrease your risk of being stopped out of a big move in the market. The risk reward potential of a trade can be significantly improve by a better trade entry.
Most of the traders make faults entry at the point where the market is already at or near the extreme high / lows from the recent state. Always traders take this decision when trend break the extreme high and continue with the expectation that the price will continue moving with the trend. But actually what will happening is when the price hits these areas, the price usually drops down into the previous range, all effect is losses. The reason for these losses is that the market will never move in the same direction after the trend reaches an extreme highs and lows. Such entry will always results in losses. The only way is to avoid such type of entry and if already entered in that point better is to exit with some loss by placing stoplosses.
Another loss entry occurs at the point if anyone trying to trade in line with the original moves where there is a large move but cannot be identify the reason behind this move. At this time the direction can change quickly and turn out to be a new move in the opposite direction. This will result in losses. Some of the traders use reversal strategy for trading. In reversal strategy traders take the trade with the expectation that market will change its trend from recent trend direction. Traders make use pivot point levels, Fibonacci levels. Trading reversals can only be used when the market is not trending in a clear direction, and should not be used in all market sessions.
Exits and entries are generally governed by fundamentals in the same way. You’re in a winning trade, and now you need to figure out how profitably you can exit the trade. You should plan your your exit point before your entry. Below we mention a number of different ways to exit as profit trade; no matter in your selection, the aim is to strike profit and not become so greedy the market is reversing on you.
Timing is always the top issue in trading. Since timing is the profit or loss determining variable, the emotional intensity of the decision is great. Every successful trader should achieve a degree of emotional control and confidence. Trade timing may give severe pressure to novice traders. But calm and patient attitude towards trading will never give a chance to develop. This problem can be avoided by control pressure at the trade time even at trading career start time. All these factors lead us to consider for trade timing the gradual method is the best one, while minimizing our risk.
How can become a profitable trader with the help of best technical analysis software. Follow are some good reads regarding this.
- Trading is a game, make your perfect move with a good Trading system
- Strategies of Scalping trading
- Role of Discipline in Trading
- Day trading strategies
- Use of Technical Analysis Software For Trade Success In FOREX, MCX, NSE (India)
- What is Day Trading & How much can earn from Intra-Day Trading in MCX / NSE/ FOREX?