1/22/2024 0 Comments Sell stopUsing stop entries to enter the market along with new market momentum is very interesting. Examples of effective buy/sell stop entry orders When you start to have success trading this way, this will reinforce the discipline you have in terms of placing your order and walking away. Many traders enter trades too early, before they really start to move, and this causes them all sorts of psychological problems like questioning their entry, over-analysing and closing trades prematurely if you enter with a stop order when the market is moving towards your desired entry level, this can help eliminate mistakes.Īlso, by setting your order and then leaving your screen, letting the market "do the work", you get into the habit of not "forcing" trades and trading in a relaxed way, instead of over-trading or entering prematurely. An entry stop order allows you to set the exact level at which you want to enter if the market exceeds a certain level, you will be filled, otherwise, you will not. There's something to be said for "letting the market come to you", rather than continually throwing in "market" orders. Reinforce discipline - If you set an entry stop order and then walk away and let the trade play out, you are trading with discipline. Traders who are obsessed with trades and glued to their screens tend to lose money, you need to be interested and passionate about trading but not obsessed with it. Instead, you can simply place a stop buy or stop sell order just above the high or low of the inside bar and then go do something else. If you use a pending entry order, you don't have to sit around watching and waiting once you spot a trade setup, you can simply enter your stop entry order, your stop loss level and your profit target and then leave for a while.Įliminate trading obsession - If you're trading an inside bar setup, for example, you don't need to wait for the market to break above the high or low of the mother bar to enter. Many of us don't extra hours to wait for the market to move towards our desired entry level. Also, unlike entry limit orders, with a stop entry order you have peace of mind knowing that if your trade is executed after you set it, it will be executed with "momentum confirmation", as we have mentioned above. You don't need to be at your computer - Stop entry order allows you to set your trade and forget about it. This does not "guarantee" that the trade will go through in your favour, but when your order is triggered the market is moving in your favour. Conversely, if you enter a "sell stop" entry, the market has to move down towards your sell order. If you use the other two popular entry orders, namely market entry or limit entry, you don't necessarily get this.įor example, if you enter a buy stop order, that means you're buying the market, and for your buy stop order to be filled, the market must be rising and entering your buy stop order, which means it has bullish momentum. This has the added benefit that the price is already moving in the direction you are trading at the time of entry and often allows your trade to quickly become profitable. Let's see how stop entry orders can improve your trading and what their main benefits are:Ĭonfirmation of momentum - When you enter the market using a stop entry order, the market is moving into your order in the direction you want to trade. The market offers a bountiful amount of trading opportunities each month, but we don't always have the time or patience to sit and stare at our charts waiting for the market to reach our pre-determined entry level.Īlso, sitting around waiting for the market to trigger an entry is a big fat waste of time and can tempt you into entering a trade prematurely or entering a trade that you otherwise could not have made.įortunately, by knowing how to use pending entry orders, you can eliminate the need to sit at your trading terminal waiting for the market to trigger an entry.
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