Entering the market is the first and most crucial step for us traders, as the quality of the entry directly affects our subsequent trading operations. If the entry point is well chosen and we start making profits shortly after holding a position, our mindset will be stable, and we can hold onto our trades. If the entry point is not good enough, the process of holding a position can be extremely painful, and we might even give up on our original trading plans.

Therefore, the choice of entry timing is of utmost importance. How can we find high-quality entry opportunities? Next, I will share some of the entry techniques I commonly use, based on my own trading experience over the past decade or so.

The article is quite long and packed with valuable information, so I suggest you bookmark it for future reference to avoid losing it. If you find it helpful, you can give me a like at the bottom of the article.

Technique 1: Choose to enter the market based on the inherent strength and weakness relationships of the trading instruments.

There are at least dozens of tradable instruments on trading software, and there are interrelations and strength and weakness relationships among them. For example, in the foreign exchange market, the mainstream direct quote currencies include the Euro, British Pound, Swiss Franc, Japanese Yen, Canadian Dollar, Australian Dollar, New Zealand Dollar, plus the US Dollar. They are exchanged against each other, forming the direct and cross quotes in the forex market.

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To arrange the strength and weakness relationships of these direct quote currencies, one must consider the fundamentals of their currencies. For instance, with the Federal Reserve consistently raising interest rates, the US Dollar is undoubtedly the strongest. The ranking from strongest to weakest is essentially as follows: US Dollar > Euro > British Pound > Swiss Franc > Australian Dollar > New Zealand Dollar > Canadian Dollar > Japanese Yen.

After establishing such strength and weakness relationships, how should we use them in practice? The key point in using this strength and weakness relationship for trading in practice is: within the same trading time frame and at the same entry time node, choosing the strongest instrument to enter the market is a high-quality entry opportunity.For example, it's easy for everyone to understand with a visual aid. Please see the image below.

The image shows the candlestick charts of the British Pound against the US Dollar and the British Pound against the Canadian Dollar, both at a 1-hour timeframe.

Both currency pairs have undergone a very similar horizontal consolidation pattern break at the hourly level, almost at the same time, which are both trading opportunities to go long.

The British Pound against the US Dollar rose by 380 pips, while the British Pound against the Canadian Dollar rose by 540 pips, indicating a clear advantage in profit potential for the British Pound against the Canadian Dollar.

Why is that the case?

By comparing the strength of the currencies, it becomes clear. The US Dollar has a stronger fundamental position than the Canadian Dollar. During the appreciation of the British Pound, it faces a more challenging task when confronting the stronger US Dollar, thus limiting the potential for upward movement. Conversely, when facing the weaker Canadian Dollar, the potential for upward movement and profit is greater.

Therefore, in this instance, the trading opportunity for a long position in the British Pound against the Canadian Dollar is of higher quality than that of the British Pound against the US Dollar.

Fundamental analysis of the strength of different currency pairs may not be precise for many traders, but this does not affect practical operations.

It is relatively easy to identify the strongest and weakest currencies, such as the Euro and the US Dollar being the strongest, and the Canadian Dollar and the Japanese Yen being the weakest. By focusing on these key strong and weak currencies, the quality of entry can be improved.

Technique 2: When different currency pairs are moving in the same direction, look for better technical resonance opportunities to enter the market.Between varieties that move in tandem, in addition to the existence of a strength and weakness relationship, at the same time period and essentially the same time node, when a trading signal is generated, there is a better opportunity for technical resonance to support the trade. This opportunity is of high quality for entry, let me give an example.

The charts below are the 1-hour candlestick charts of gold against the US dollar and gold against the euro (the two are closely related).

At the 1-hour level, both varieties formed a structure of a downward trend line breaking upward at the same time node. After the break, gold against the US dollar ran up by 270 points, while gold against the euro ran up by 400 points below.

The difference between the two is very large. What caused this issue? Let's analyze the technical positions of these two varieties again.

The chart shows the 4-hour candlestick charts of these two varieties. At the 4-hour level, the problem can be seen very clearly.

Gold against the US dollar at the 4-hour level is in the stage of wave 4 consolidation, and wave 3 has already had a significant volume increase with a large space rise. In this situation, the space for the end of wave 4 and the start of wave 5 will not be very large, and the overall pattern is at the end of the market trend.

Gold against the euro at the 4-hour level is at a critical double bottom position, with the market near 1741, there is a very obvious important support. Moreover, before the break and entry at the 4-hour level, there is a clear downward break support to induce a short position, and the overall pattern is at the stage of the market starting.

After comparison, it is clear at a glance. Both varieties showed a downward trend line breaking upward at the 1-hour level at the same time. At this time, gold against the euro should be chosen because the opportunity is better.

Skill 3: When varieties rise and fall together, choose the entry opportunity with a standard pattern and a small stop loss.

In practice, it is often encountered that related varieties appear to enter the market at the same time. At this time, we should choose the trading opportunity with a smaller stop loss space, an easier to recognize entry pattern, and a standard structure, which is of high quality.The chart shows the 15-minute candlestick charts for both gold against the US dollar and gold against the euro.

During the same 15-minute period, at the same time node, similar downward trendline breaks were formed. Among these two break opportunities, we should choose the break opportunity for gold against the US dollar.

There are two reasons for this. First, the downward trendline has been tested multiple times in a row, verifying the effectiveness of the trendline, which would lead to a higher success rate of the break. Second, the stop-loss space is smaller, only 46 pips.

In contrast, the trading opportunity below has a trendline that is not sufficiently tested, and the stop-loss space is larger, at 66 pips.

Subsequently, the upward movement space for both instruments is similar, both being around 150 pips. The order above has a smaller stop-loss, achieving a risk-reward ratio of 3:1, while the order below has a risk-reward ratio of only 2:1, which is a significant difference.

Therefore, the entry opportunity for gold against the US dollar is of higher quality.

Technique 4: Look for critical points in market turning points to enter.

In practice, many traders are torn when it comes to entering the market. Entering from the left side to catch a bottom in a trend carries significant risk; if the stop-loss is not well managed, it can lead to substantial losses. On the other hand, entering on the right side after the trend has been confirmed may seem safer, but by the time the reversal occurs, the potential entry point has been missed, and the cost-effectiveness of both approaches is not high.

In practice, try to enter at the critical point of market turning points as early as possible, recognizing reversals early, which allows for good control of the stop-loss and minimal wasted space. A small stop-loss coupled with a large take-profit is undoubtedly a high-quality entry opportunity.

The chart shows the gold against the US dollar candlestick, with the left side being the 4-hour candlestick and the right side being the 30-minute candlestick.In the chart on the left at the 4-hour level, after testing the support near the previous low of 1945, switch the candlestick chart to the 30-minute chart on the right.

A consolidation pattern formed at the bottom in the 30-minute chart, and consecutive reversal candlestick patterns appeared. At this point, the reversal pattern of the candlestick is taken as the turning point of the trend, and one can aggressively enter the market with a stop-loss space of 40 points. The market moved up by 260 points, with a small stop-loss and a large reward-to-risk ratio.

Such high-quality opportunities require the cooperation of both large and small cycles. The large cycle is at a clear and important key level, and the small cycle has a clear reversal pattern. Only when these two are combined can they be called high quality.

Technique 5: Look for high-quality entry opportunities in continuation patterns.

The previous high-quality trading opportunity was for a reversal trend, and now let's talk about the high-quality entry opportunities in continuation patterns.

Start with a trial position at the end of a continuation consolidation pattern, and then use a scaling-in model to make a high-quality profit from a single continuation pattern opportunity. This operation is also a high-quality entry opportunity.

The chart shows a 15-minute candlestick chart of gold against the US dollar.

After a wave of rising, the market formed a downward flag consolidation pattern, with a long consolidation period and a standard pattern.

At the end of the consolidation pattern, after testing the support below and forming a reversal hammer line, the first position was opened.

Then, as the market formed a flag break, the first scaling-in was done. After scaling-in, the market developed upwards, and the second scaling-in was done when the market reached a new high after a pullback consolidation. The position was closed after the market surged.The operation mode of this kind of position scaling can adopt a proportion of 1-2-2. The first order is considered a test position, so it starts with a light position (if it turns out to be wrong, the position is light, and the loss is controllable).

When the second order enters, the first order is already in a profitable state. The second order enters at the break point of the continuation's consolidation pattern, which is in line with the trading habits of most traders. This position has a higher level of certainty, and the proportion of the position is adjusted to 2.

During the second scaling, both of the previous two orders have a significant floating profit, and there has been a pullback and consolidation before entering, which also has a high level of certainty. The proportion of the scaling is also adjusted to 2.

In this way, an opportunity starts from a small position and gradually becomes larger, making a high profit. This is also a high-quality entry opportunity.

In fact, the reason why high-quality opportunities are high is that they appear less frequently and also require long-term trading experience and skills. It's like looking for a partner; good partners are harder to find, and you might not get a good one if you just pick someone off the street. The rarer something is, the better it is, that's the principle.

Therefore, when facing many entry opportunities, we need to make certain selections. Even if it tests our patience, we must persist and grasp higher quality trading opportunities, rather than jumping in at the slightest provocation.

The courage of a reckless person is ignorant and brave, while the courage of a scholar is brave after knowledge, remember, remember.