Finding high probability entries in the Forex Market is often seen as the most important aspect of Forex trading. Forex trading is however all about probabilities and all we are trying to do is to stack the probability of success in our favour. Therefore failures should be expected as the price of trading the Forex market but by focusing on those aspects that you have found to work you can have more winners than losers.
In process below is one that may help you find the entry techniques that work.
Firstly be aware of many ways to enter the Forex trading market as you can. This will increase your knowledge of market behaviour but make you a complete multi-skilled trader. You need techniques you can use in sideway, slowly trending, fast trending, spiky, consolidating, reversing, random up and down market conditions because that is what the market does all the time.
Bounce retracement, breakout and trending techniques should cover most of these market conditions.
Volume increase, channel trading, support and resistance, price exhaustion, grid trading, type of techniques should cover bounce trading. Bounce trading is when a turning point is created when the price bounces back into the direction it came from.
Trendline violations, price pattern breakouts or continuations, support and resistance violations, straddles, multiple moving averages techniques are examples of breakout trading. Breakout trading it when the price breaks through support or resistance creating a new trend.
Support and resistance, moving averages, fractal indicators, trend retracement entries, Fibonacci levels are examples of trending techniques used. Trending techniques are used when the price is in an established trend such as the six to nine hundred pip one way trends experienced by the Euro recently.
Once you have these techniques identified back trade them finding examples of each technique on historic charts using different currency crosses and different market conditions. After that back trade finding entry techniques that you find particularly attractive more intensively or demo trade the techniques.
Then the most important step is to combine a number of your favourite entry techniques to form a strategy. An example of this is: If you find trendline violations on their own give you good results but that moving average crossovers and certain momentum signals are just as effective on their own why not combine these good trading techniques into one strategy. Make sure you have different strategies for both sideways and breakout trending markets.
Going through this process may sound laborious but it well worthwhile. It will make you a better multi skilled trader. The idea that you will find one technique that you can trade in any Forex market condition that presents itself, at any time of day using any currency can lead to disappointment.