For effective trading, the correct determination of the entry point is the most important, since in this case it is possible to increase the probability of making a profit and potential income.
Correct determination of the point significantly reduces the likelihood of loss, while making profit becomes more likely due to the possibility of transferring stop-loss at a break-even level after the price has overcome the opening position.
In order to determine the entry point, you can use a variety of techniques, among which:
– technical graphical analysis;
– individual indicators or a combination thereof;
– semi-automated advisors that signal entry points to sell or buy by combining data from several indicators.
Indicators and entry points to the Forex market
Among the most common indicators of entry into the Forex market should be called:
– Moving average analysis.
Stochastic is an indicator that shows overbought and oversold markets. The entry of the chart into the corresponding zones indicates the possible opening of a position to buy or sell, however, it should be understood that only one stochastic cannot be used as an indicative and reliable indicator, it can only be a component of the trading system. In this case, the data should be analyzed together with the price chart or when using other indicators.
The same can be said about moving averages with different periods, the relative position and intersection of which indicates the direction of the trend and its possible change, which can also be used to open a position.
In general, it should be said that today there are many indicators and various tools used to analyze the market and to assess the feasibility of entering the market at any given moment. However, it is impossible to say that some of them are more, while others are less effective, since the reliability of the data and their indicative are determined solely by the trading system and the strategy of each manager.
But for any system it is very important to correctly determine the entry point, as well as the exit point from the market, in order to get maximum profit and reduce potential risks during each of the trading operations.