The Power of "W" & its 3 compadres... How to Enter like a Pro
Hi Traders,
If you've ever questioned your entry strategy or have entered too soon, or found yourself gun shy and entering after the party is over, then you may find this guide helpful.
This isn't a over the top strategy, nor is there any special skill needed to apply it to your trading.
I've found personally, that the easier and more simple it is, the better results I get long term.
Over the years, I've simplified this down to three confirmations before entering a trade. Yes, you will leave money on the table by not getting in at the exact bottom, but how many times can you count on a hand that you've done that successfully? Probably not many...
Of course, this is just technical analysis and it will serve you well to have a "fundamental strategy" for picking the projects you choose to enter in the first place. But after you've located the projects you want to buy, you then can use technical analysis to locate a price point to enter the market.
Here are the three confirmations I live by:
Confirmation #1: ("W" Pattern)
- RSI/ Price action forms a clear "W" pattern.
- The two bottom points slant upwards.
- You could call this a double bounce/ bottom as well.
Confirmation #2: (MACD)
- MACD signal line crosses above the histogram.
- Signal lines are converging from each other. (Moving apart/ widening)
Confirmation #3: (EMA cross/ Final Confirmation)
- EMA cross
- Price Action crosses above the EMA lines/ ribbon
Pretty simple right? Well, you would think so but then comes the mental aspect. Having the mental fortitude to always live by the rules you set for yourself is what separates the pros from the amateurs. You don't FOMO, you don't fall in FUD, and for the most part, you don't listen to others, and especially don't listen to others without doing your proper due diligence.
Conducting TA is only one step in the process and in my eyes, it's the second step. You have to have a process for locating projects that are going to present the highest follow-through on the TA you chart out. Bc yes, a lot of false signals can come from set-ups you think would be a winner, to only have the set-up fail on you. This generally comes down to a weak project with weak fundamentals.
Hopefully, this was understandable and simple. If you've been around trading for any amount of time, you will most likely heard of all three of these indicators. Good luck!
If you've ever questioned your entry strategy or have entered too soon, or found yourself gun shy and entering after the party is over, then you may find this guide helpful.
This isn't a over the top strategy, nor is there any special skill needed to apply it to your trading.
I've found personally, that the easier and more simple it is, the better results I get long term.
Over the years, I've simplified this down to three confirmations before entering a trade. Yes, you will leave money on the table by not getting in at the exact bottom, but how many times can you count on a hand that you've done that successfully? Probably not many...
Of course, this is just technical analysis and it will serve you well to have a "fundamental strategy" for picking the projects you choose to enter in the first place. But after you've located the projects you want to buy, you then can use technical analysis to locate a price point to enter the market.
Here are the three confirmations I live by:
Confirmation #1: ("W" Pattern)
- RSI/ Price action forms a clear "W" pattern.
- The two bottom points slant upwards.
- You could call this a double bounce/ bottom as well.
Confirmation #2: (MACD)
- MACD signal line crosses above the histogram.
- Signal lines are converging from each other. (Moving apart/ widening)
Confirmation #3: (EMA cross/ Final Confirmation)
- EMA cross
- Price Action crosses above the EMA lines/ ribbon
Pretty simple right? Well, you would think so but then comes the mental aspect. Having the mental fortitude to always live by the rules you set for yourself is what separates the pros from the amateurs. You don't FOMO, you don't fall in FUD, and for the most part, you don't listen to others, and especially don't listen to others without doing your proper due diligence.
Conducting TA is only one step in the process and in my eyes, it's the second step. You have to have a process for locating projects that are going to present the highest follow-through on the TA you chart out. Bc yes, a lot of false signals can come from set-ups you think would be a winner, to only have the set-up fail on you. This generally comes down to a weak project with weak fundamentals.
Hopefully, this was understandable and simple. If you've been around trading for any amount of time, you will most likely heard of all three of these indicators. Good luck!