Entry confirmation
Wait until price itself shows the reversal instead of entering on an assumption. The stop-loss comes out shorter.
Entry confirmation — what it is?
Confirmation is the event after which a zone stops being just a marked-up area and becomes grounds for an entry.
Three kinds work: a structure shift on the lower timeframe, a reaction out of the zone with impulse and an imbalance, a rejection of the level by a candle with a long wick.
Confirmation does not raise the probability of the move. It reduces the number of entries in situations where the zone gets sliced straight through.
Entry confirmation — how it is built?
The order is fixed: price reached the alert level, entered the 0.25–0.75 range, and a structure break in the right direction appeared on the lower timeframe. Only then do you enter. Without the third item there is no trade.
Entry confirmation — common mistakes
Entering on a touch of the zone without waiting for confirmation.
Collecting five confirmations in a row and entering once the move is already over.
Treating any green candle as confirmation.
Changing your confirmation requirements from trade to trade.
Related to
Glossary
- timeframe
- the period one candle holds: M5 is five minutes, H1 an hour, D1 a day.
- impulse
- a fast directional move with large candles.
- imbalance
- a stretch of chart price went through too quickly, without even trading.
- candle
- the element of the chart that shows four prices for a period: open, high, low, close.
- long
- buying in expectation of a rise.
- wick
- the thin lines above and below the body that show the high and the low of the period.