What can be used as entry and stop loss points?

When trading during the day, it is important to develop a competent entry and exit strategy. One option can be the use of an entry point and a stop loss. An entry point is a specific price at which a trader enters a trade. A stop loss is the price point at which a trader exits a trade if the market starts to move against him. Understanding and using both orders will help manage risk and protect capital from loss.

The entry point, or price to enter the trade, is determined by special technical indicators: support and resistance levels, Fibonacci levels, and others. Each indicator works on an individual scheme and will help to pick up an ideal entry point.

Stop-loss is necessary not only for determining the concrete price for an exit but also for calculating the amount of maximum loss which a trader is ready to undertake as a result of a negative result of a deal closing. For example, the trader can set the stop-loss at 10%. It means that he will leave the deal if it starts to lose 10% of its value.

Indicators

There are a few things that every trader who decided to try the scalping strategy in Forex should keep in mind. First, it is necessary to choose proper indicators. Scalping indicators are designed to warn a trader about possible price movements in advance. Popular technical tools are the convergence and divergence of moving averages (MACD) and the Relative Strength Index (RSI).

Patterns

Second, a trader must pick up patterns. These are common patterns that can be profitable for scalping, including popular technical analysis patterns such as head, shoulders, triangle, and channel. These patterns can give a trader an idea of how and where the market is moving, helping to make informed and informed trading decisions.

Candlestick

A candlestick is a technical indicator that provides information about the true market sentiment and can tell a trader about potential reversals. The most common candlestick models are doji, hammer, and shooting star. A trader who has included all three elements in his strategy has all chances to become a successful scalper.

Fibonacci levels

A technical indicator used to identify potential resistance and support levels by applying the Fibonacci sequence. Accurate predictions of these levels help traders make fast and profitable trades. Fibonacci retracement levels are 23.6%, 38.2%, 50%, and 61.8%. These levels are derived from the Fibonacci Sequence where each successive number is a sum of the previous two.

For example, a Fibonacci sequence would be a set of 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, and so on. The strategy of Fibonacci levels is based on the statement that prices in the market tend to recover by a certain percentage before continuing to move in the original direction.

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