Trade Entry Setup

Here is a basic yet powerful long trade setup. We’ll explore the exact chart configurations that signal promising entry points for your trades. Think of this setup as your trading compass – it helps point you in the right direction when market conditions align.

Before we dive into the specific entry criteria, let’s confirm you’ve completed the essential preliminary steps.

1) First, your scanner should have identified a stock matching your initial screening parameters.
2) Second, you should have verified that the stock shows healthy trading activity with adequate trades per second and manageable risk levels based on the bid-ask spread.

Once these foundational requirements are met, it’s time to look for the perfect entry setup. Here’s what you need to see on your charts, presented in a clear sequence:

• The stock price must be trading above the Volume Weighted Average Price (VWAP), showing overall bullish sentiment.
• Your 10-period Exponential Moving Average (EMA) should be trending upward, confirming positive momentum.
• The current price needs to be positioned above this 10-period EMA, reinforcing the upward trend.
• For additional confirmation, check that the lows of the previous five candles are all above the 10-period EMA.
• Finally, look for a down bar, which often presents an optimal entry opportunity.
• When all these conditions align, you can place your entry order just above the high of the previous bar. This strategic entry point helps you capture the momentum while maintaining a disciplined approach to risk management.
• It is allowed for the low of previous down bar, OR the low of entry bar to dip below the 10 EMA.

For crucial details about protecting your capital through proper stop placement and position sizing strategies, please visit our dedicated risk management page. Remember, successful trading isn’t just about finding good entries – it’s about managing risk effectively.