In this guide, we're going to teach you the ultimate market entry strategy. You'll learn the secret to stop losses, how to enter a trade and when to take profit. As traders, we’d all agree that getting into the market at the right price and the right time is key to being successful. But did you know that a good entry is the least important part of the profitable trading equation?
There’s something that has far more important when it comes to whether or not you will be successful and make money as a trader. Your exit. The price at which you exit any trade determines your profit or loss. This means that the right exit can minimize losses or maximize gains. Today we're going to discuss the key principles you need to pay attention to when entering a market. Also, read the guide on top stock market blogs here.
Pay Attention To Your Entrances and Exits
- Enters trade
- Up fifty Pips.
- Turns around and stops you out.
- Enter trade.
- Stopped out for 30 pip loss.
- Reverses and goes to where your TP was.
In these two types of scenarios, you must rely on more than just a custom technical Indicator to achieve success.
Here's the Good News
By reading this report, you are going to understand the #1 reason that most traders lose money when it comes to entering markets. You'll also learn how simple it is to fix this problem in your own trading. Installing our custom EFC mt4 indicator will allow you to see these zones right on your chart.
The #1 Reason Traders Fail When Entering a Market
They don’t have a clue where to put their stop loss and take profit. And why don’t you know where your stop and target should be? Because you’ve been misled by a thousand different websites and "trading gurus" who don’t know the first thing about trading profitably in the real world. Have you ever used and mt4 indicator that was so simple, and yet made money?
Let me give you an example…
A “Guru” will teach you a Buy Set-Up.
Here’s how it Looks. Buy on the continuation:
OK, so where does the Stop Loss go?
Everyone knows that the technical stop is below the low, right?
Well, now we have a problem.
Even though this set-up looks fine, and the market might even be likely to go UP from here, you’re still extremely likely to LOSE this trade.
The Market is not likely to go straight up from any point in the Market without shaking you out of the trade first. Even if you’re using a great entry tactic. The idea of putting your stop below the low sounds nice but isn't practical.
Look at any given chart on any time frame (especially the lower time frames) and you are very likely to see movement like this:
Regardless of whether the market is spiking up or spiking down (or even building a trend), it's always taking out levels along the way.
Very rarely will the market build in a way where it doesn’t shake out anyone with a stop loss close by.
So why on earth would you place your stop loss below the most recent low?
You’re putting your stop loss in an area where the market is almost guaranteed to move through regardless of whether it is going higher or lower…
In other words, you are almost guaranteeing a loss.
Yet, this is what the average Guru online recommends. This is what we call the “Technical Stop.”
No wonder the average “Technical Trader” at home can’t make any money in the Market.
This point is the most critical thing you need to understand. Write this down!
Whether the Market is planning to go up OR down--
REGARDLESS--It is still extremely likely that it will move in BOTH directions enough to take people out of the trade with stops near the recent levels BEFORE making its ultimate move.
Traders are constantly following these “Guru” strategies and almost every one of them has them placing their stop-loss directly in the market’s most likely path!
This is a HUGE problem. Do you feel like you are taking way too many losses?
This is why!
But more Good News...
The solution to this HUGE problem is very simple…
Here’s what you have to do to reverse your negative results:
Instead of making your stop loss a sitting duck in the market, make your stop loss hard to find. That way, the same market moves that are stopping everyone else out will be depositing cash into your account. This simple logic works with any Entry Strategy. It is designed to finally put retail traders in a position to win more trades and add money to their trading account.
Remember, the tendency of the Market is to whip around. The Market purposefully creates chaos because it is very difficult to trade profitably in chaotic market conditions. One way to be sure that the chaos in the Market causes you to lose money is to leave your stop exposed in the middle of the market. Yet, this is what all the Gurus online are teaching you to do.
They’re teaching you to do the exact opposite of what simple logic would suggest: If the market is going to float up and down (which it will), just put your target in the way so you exit with a winner. A typical strategy will suggest a stop loss right in the middle of the market's path and a take profit that is very difficult to reach. This puts you at an almost impossible spot to win trades on a regular basis.
Our approach simply flips the odds around. Instead of the chaos being likely to stop you out, we allow the Market to float around until it hits our Take Profit… About 75% of the time!
How to Properly Enter A Market
At any given time, the market is like to float both higher and lower than the current price before making a larger move in one direction or the other.
Regardless of your entry strategy, even if it is a great technique, you can’t change the fact that the market loves to float up and down and is always looking for stop losses to take out along the way. Sure, you can time the market just right occasionally and win a trade with a tight stop loss. But I wouldn’t count on doing that with any type of regularity.
Regardless of what any Guru might tell you, there is no indicator or method or signal that can time this 4 trillion dollar market just right over and over again. Unfortunately, no one has that much control or insight (because it is impossible). The market is going to do what it wants when it wants. Which usually means crashing through stop losses on both sides of the market.
But, there is an easy way to protect yourself against this.
It’s something that most people don’t like to talk about. But it’s a simple way to gain a massive advantage, especially for traders using any time frame less than daily charts.
Gaining an Edge: The Ultimate Market Entry Strategy
Place your target inside the area that the market is likely to float. Then, make your stop loss harder to take out by placing it outside the area that the market is likely to float. Yes, this does mean a negative risk to reward ratio. While some "trading gurus" will tell you that it’s impossible to make money without a positive risk/reward, this is simply not true. It needs to be understood that while trading with a positive risk to reward is good, it’s certainly not required.
A trader can be profitable with a negative, positive or equal risk to reward ratio. It just depends on the number of trades won vs the number of trades lost. To suggest that trading with a negative risk to reward would make it impossible to be profitable is a poor understanding of basic mathematics. Again, there is nothing wrong with using a positive risk/reward. But, if it is a far easier task to trade with an 80 Pip Stop Loss and a 50 Pip Target and win 70% of the time, why not achieve success that way? After all, I don’t know many retail traders using a positive risk/reward on intermediate timeframes and finding any success. I think you’ll find once you begin using this new entry/exit approach, that trading with a slightly smaller take profit has an exponential effect on your winning percentage. This makes it much easier to make consistent profits.
How to Exit the Trade Using ATR:
Rather than entering a trade with the “technical rules," we protect our stop and place our target in a high probability area.
A high probability area for your target is 4 - 7 times the
ATR on a given time frame.
In other words, if you are trading a buy pattern on the 1-hour chart, you’d look at the current ATR of that 1-hour chart (ATR 20) and determine the pip value. If the ATR pip value is 7 pips at the time of entry, you know that a likely target area is somewhere between 28 and 49 pips. The next step is to draw a zone or place lines on the chart from 28 to 49 pips and then move to a larger time frame to determine where the most sensible Target within that zone would be.
Anywhere within the 4 - 7 ATR zone will put you at an advantage to exit the trade with a win. This happens a high percentage of the time because the market has proven that it is likely to float within that range more often than not. But using technical analysis to enhance your chosen exit point WITHIN that zone will take your profitability to the next level. You can use things like highs and lows to give you an enhanced edge, realizing that the key advantage is already having your stop loss in a “High traffic area.” When you combine that with a sensible entry, you are in very good shape to win a high percentage of your trades.
But What About Your Stop Loss?
The Stop Loss is equally as important as the Take Profit, if not more! The reason so many traders take unnecessary losses is that they place their Stop in an area that makes it way too easy for the Market to hit. Knowing that the Market is moving sideways and floating up and down more often than not, why would you place your stop in the middle of that Chaos? It’s like hiding from a storm by sitting in the path that it's MOST likely to go in.
We don’t want to make it easy to find and hit our Stop Loss so we move it outside of the high probability zone. Our studies have shown that if the Stop Loss is outside the 7 ATR zone, the chances of getting stopped out are reduced dramatically. We use a Stop Loss zone of 7 - 12 ATR to find the best place to put our stop loss. Just like the Take Profit, we zoom out to a longer time frame and key in on a sensible place within that stop zone.
Again, the key here is to protect our stop as best we can and make sure it’s not an easy target for the constantly fluctuating Market. We know that a certain percentage of the time, our stop loss will be taken out no matter where we place it, but protecting it by placing outside of the Market’s direct path will help you take a fraction of the losses.
The combination of putting your Take Profit in a high probability area and placing your Stop Loss in a low probability area has a dramatic effect on your trading performance.
One way to make this process extremely simple is to use our Profit Zones tool which is an automated tool that sits on your MT4 chart and places our suggested zones for you.
With the zones sitting on your chart, you simply click "Buy" or “Sell” at any time, on any time frame, regardless of the type of strategy you are using.
The Profit Zones will draw a high probability zone for your Take Profit and a low probability zone for your Stop Loss to make sure that you have a high percentage chance of winning every single entry.
You then just place your SL and TP within the orange and green zones respectively to ensure that you are in a high probability trade. No matter when you decide to trade or what direction you’re choosing to trade in, the Profit Zones will massively increase your chance of closing out that trade as a winner by using the "sweet spots" in the market to choose your exits. And with MT4, the trades are easy to set up.
When you have a trade setup that you like, you simply click the “Buy” or “Sell” button that our Profit Zones tool places directly on your MT4 chart. Then make your entry within the MT4 terminal and simply drag your stop loss and take profit within the zones. The combination of putting your target in the green zone and stop in the orange zone creates a very high probability trade every single time you enter the market. And it’s extremely quick with MT4 as well.
You can use the Profit Zones in your own trading!
You can use the Profit Zones tool in your own trading. Because you downloaded this report, you can get our powerful zones for just $49! And we even guarantee that they work so you have no risk in testing them out. Watch this Video for all the Details and make sure you grab the Profit Zones today.