Lesson 2 - Types of Entries

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THREE TYPES

OF
ENTRIES
The Three Types of Entries
Risk Entry Safe Entry Riskiest Entry
Confirmations
Confirmations are moves in the market that indicates to us that price is actually
moving in our direction. The more confirmations we have, the higher probability
it is that our analysis will play out.

There are various types of confirmations that are used by traders but we focus
on these major 2.

1. Structure Rejection
2. Trendline Break
Structure Rejection
Structure rejection is when price approaches
our structure level and shows rejection candles
and wicks.

This indicates to us that price is slowing down


and is losing momentum to the upside. Price is
unable to break that structure level and as a
result, reverses.
Trendline Break
Corrections are small bodied candles in the
opposite direction of the trend. This usually
occurs after a big move (impulse) .

Corrections can often be marked out using a


trendline. We use that trendline as a guide and
monitor the trendline for a break.

Once broken, we can assume that price is


resuming the trend.
Entry 1 - Risk Entry
Structure Rejection? YES
Trendline Break? NO

RISK entry because we only have 1 confirmation, which is the rejection of


the structure.

Entry: When we see rejection of the structure.

Pros:
We can get in early and catch the move right from the start
We can have a small stoploss just above the structure and rejection
candles/wicks

Cons:
Price has NOT broken the trendline so there’s a chance that price may
bounce off the trendline and go higher.
Entry 2 - Safe Entry
Structure Rejection? YES
Trendline Break? YES

Safe entry because we have 2 confirmations. We can see price reject the
structure level and then price broke the trendline.

Entry: On break of trendline

Pros:
We have 2 confirmations that price is moving in our direction.

Cons:
We won’t catch the move from the top
We will need a slightly bigger stoploss that is above the correction and
structure
Entry 3 - Riskiest Entry
Structure Rejection? NO
Trendline Break? YES

This is the riskiest entry as price didn’t go up to our structure level and
retest it. Sometimes price breaks down early due to high momentum.

Pros:
We can catch the move if it goes early

Cons:
The stoploss will be greater as we need to have it above the structure.
This is because price may create a complex correction that may retest
the structure later, even after the trendline break occurs.

*You can have an aggressive stoploss above correction after trendline


breaks.
Entry 1 - Risk Entry Example

GBPUSD

Entry: Rejection of structure


Stoploss: Above Structure

Stoploss: 25pips
Take Profit: 200pips
Entry 2 - Safe Entry Example

GBPUSD

Entry: Rejection on break of trendline


Stoploss: Above Structure

Stoploss: 50pips
Take Profit: 200pips
Entry 3 - Riskiest Entry Example

CHFJPY

Entry: Rejection on break of trendline


Safe Stoploss: Above Structure

Safe Stoploss: 70pips


Take Profit: 190pips
Entry 3 - Riskiest Entry Example
(Aggressive Stoploss)

CHFJPY

Entry: Break of trendline


Aggressive Stoploss: Above correction

Aggressive Stoploss: 20pips


Take Profit: 190pips
KEY POINTS
Be REACTIVE
The market does what it wants. Our job is to preempt the market and be prepared for
every scenario. This why we prepare ourselves by having 3 different entry methods.

Do NOT Rush
Wait for the market to make its move first. You can easily get caught out if you make
the first move.

The More Confirmations, The Better


We want as many reasons as we can get to enter the trade. This gives us the highest
probability that our analysis will play out.

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