Of course, a good trading system not only clearly tells you where to buy but also where to sell, how much to buy, how much to sell, and so on. All operations in trading have clear rules within the trading system.

A complete trading system includes these four parts: determining the direction of the market, entry points, stop-loss standards + profit-taking standards, and position management. The entry point is a very important part of the trading system, just like the four tires of a car; without them, it certainly won't run.

Moreover, the entry point is closely related to the subsequent stop-loss and profit-taking standards. The position of the entry point determines the size of the stop-loss space, the use of the position, and directly affects the profit-to-loss ratio, which I will explain in detail later.

When your entry point is poorly chosen, your trading stop-loss space will be large, and the position must be correspondingly reduced, and the profit-to-loss ratio will also decrease, resulting in less trading profit.

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On the contrary, if you choose a good entry point, your stop-loss space will be small, the position can be appropriately increased, the profit-to-loss ratio will also increase, and the profit will increase.

The chart shows a 15-minute candlestick chart of the Euro against the US Dollar.

The market formed a double bottom break at the bottom, and after the break, there are two different entry options. One is to open a position near the break point, with the stop-loss point placed at the right low point of the double bottom, with a stop-loss space of about 40 points.

Another way to enter is after the market breaks and falls back, forming a reversal candlestick before entering. The stop-loss is also placed at the right low point of the double bottom, with a stop-loss space of only about 25 points.

Let's calculate based on the market reaching a high of 1.07810 the next day:

The first entry method, with a higher entry position and larger stop-loss space, has a profit-to-loss ratio of less than 2:1 at the 1.07810 level.The second method of entry has a lower entry position and a smaller stop-loss space, reaching a position of 1.07810, with a profit-to-loss ratio of more than 3:1.

In the same double-bottom trade, different choices of entry points can lead to a significant difference in the final outcome.

Therefore, a good trading system should not only clearly inform us where to buy but also choose good entry points.

Let me discuss some key details about the entry points with everyone.

1. The time frame for entry points is divided into the primary level or a smaller level.

The primary level refers to the time frame chosen for the entry point, which is the same as the time frame used to determine the direction of long or short positions, for example, we determine the long or short positions on a 1-hour chart and also choose the entry point at the 1-hour level.

The smaller level refers to the time frame chosen for the entry point, which is different from the time frame used to determine the direction of long or short positions, for example, we determine the long or short positions on a 1-hour chart and choose to select the entry point at a smaller 15-minute level or 5-minute level.

2. We often choose two types of points as entry points, which are the breakout point and the pullback point.

The breakout point as an entry point is when the market breaks through the high or low points of the consolidation pattern, or when it buys at support and resistance levels.

The pullback point as an entry point refers to the point after the market has been established, where it is bought as an entry point after a pullback and then starts again.3. Trading systems with position scaling have multiple entry points for buying.

Some trading systems incorporate the operation of scaling into positions, where during each trade, one can buy at several entry points.

Aggressive scaling entry points are often used to add positions when there is a floating loss, a logic that is more commonly used in left-side trading. For example, in a bottom-fishing trade when the market is declining, several entry points are set in batches as the market falls, with each batch being bought in sequence, and a unified stop-loss is set.

Conservative scaling entry points are typically used to add positions when there is a floating profit, a logic that is more commonly used in right-side trading. After an order enters the market and generates a floating profit, a scaling entry point is set in line with the trend to increase profits.

Entry points are very important in a trading system, and they need to be adjusted in detail in conjunction with other structures of the trading system, rather than being considered in isolation without proper context.

I have also written many articles on trading systems in the past, and those who are interested can check out my article column.