Essentially, a trading has two key moments that can determine its success or failure:Â the time of entry and the time ofÂ departure. It seems very obvious, but it is something that requires our maximum concentration not to make mistakes in those crucial moments, especially when entering a trade.
Never enter a trade on impulse
There are several factors that come into play when deciding the point of entry.Â One of them is to always keep in mind the impulse and correction movements inherently carried out by every market.Â In this way, if we want to position ourselves in favor of a bullish movement of a particular product,Â it will not be optimal to do so at a point where the price is clearly in aÂ bullishÂ momentum movement, since the correction will be much closer to that movement, and we could stay out of the trade if in that corrective movement we will skip the stop.
We always have to wait for the corrective movement against the sense in which we want to enter to position ourselves at an optimum point to the movement.Â It may be unnatural to enter bullish, for example, just when the price is falling, but that is theÂ optimal entry point.Â Although it is also true that the more we try to hurry at the entrance, the greater risk we will be taking if that corrective movement has not yet ended.Â As always, it is a matter of understanding very well the product that is being traded and analyzing how it moves habitually.
Your stop loss should be covered with supports or resistances
Another golden rule to adjust your entry into a trade is to evaluateÂ where your stop loss will be positionedÂ in that trade, which we remember, should be fixed and evaluatedÂ based on the maximum risk that we assume with respect to our available capitalÂ .
We should never leave a stop loss without anyÂ natural hedging of the price.Â The stops should ideally always be above resistances in the case of positioning us down, or below supports if we position ourselves upwards.
There must be a technical reason to justify that before reaching our stop loss, the price must overcome an area that previously has meant a point with so much supply or demand that the price has not been able to break.Â The idea is: if the price touches our stop, it must be because in effect we have erred our trade and therefore it is advisable to leave it.Â You should never run a stop loss because you have selected a bad entry point.Â However good a trade is, if the optimal entry point leaves us with an unprotected stop loss, it is better not to make it.
Watch out for breakeven tickets
Finally, you have to be very careful with the entrances to breakeven. There are many people who program their entrance to the break of a certain relevant resistance, for example, considering that at the moment that the price breaks, that level is going to shoot upwards.
Entering breakeven involves an excessive risk, and it is much better to wait for the broken zone in the subsequent correction to re-position itself.